Saving for retirement is something many millennials want to put off. After all, since Millennials have entered the job market, things have been slow. To this group, life is just getting started. Things, like buying a home, moving out, and being financially responsible have just started happening.
That’s why there’s no better time for saving for retirement than the present.
The financial advisers and wealth management specialists at Knightsbridge PCS are providing Millennials with the resources to save for their future without compromising their current needs. Here, Knightsbridge PCS presents five quick tips for millennials looking to start saving for retirement.
Start a 401(k)/IRA
401(k) and IRA plans are used to save money for retirement. They are similar, however, an IRA is an option for those who an employer-based plan is not available, such as a 401(k), or if a 401(k) plan is not enough to supplement retirement.
A 401(k) helps an individual save for retirement by providing an additional sum of money from their paycheck or salary.
“A 401(k) is a retirement savings plan sponsored by an employer,” writes the Wall Street Journal. “It lets workers save and invest a piece of their paycheck before taxes are taken out.”
“Taxes aren’t paid until the money is withdrawn from the account,” they write.
Invest spare change
Apps like Acorn allow individuals to put spare change toward stocks and other forms of investment. Instead of using this spare change to buy daily coffees (which can become a major expense quickly!), Acorn allows you to generate additional money from your current income. Furthermore, this option allows for money to be saved without ever having to meet with someone or even regularly think about it.
Contribute more every time you can
If you receive a bonus or come into some unexpected money, think carefully about how much you actually need and how much you can afford to set aside for retirement. Remind yourself that needs include expenses such as rent, groceries, and loan payments- not a well deserved pamper session. Of course, treating yourself is a personal investment, but there are ways to do so that are financially responsible for your income level.
In addition, when receiving a large sum of money, say from a tax return, for example, saving most of the amount, or at least a substantial percentage can push retirement savings forward. It may seem like a little step, but these little steps add up, and once it’s time to retire, you will be incredibly grateful for your frugality.
Pay off credit card debt
Many millennials are saddled with debt. Credit cards and school loans can eat away at retirement savings. The amount you will pay over time due to interest increases each day if a credit card bill or other loan isn’t paid promptly.
“People who are paying off debt have less discretionary income available to save for the future,” says Forbes. “And saving for retirement has become increasingly essential.” Thus, it is important to pay off debt before you start focusing on retirement savings. To tackle debt quickly, remind yourself that the quicker you pay off debt, the better your retirement will be.
As a millennial, every day you put off saving for retirement will cost you. The sooner you get started, the more money you will be able to save over time for retirement. You will also have time to strategize and implement new retirement plans as they suit your lifestyle and needs.
Knightsbridge PCS help millennials save for retirement with our comprehensive financial planning, pension, and other services. To learn more, visit our site here. We’ll help you choose a financial plan that is best for you.