If you’re a millennial, you may not think it’s time to start saving for retirement. After all, you’re still young, and you have your whole career ahead of you. Unfortunately, this state of mind can set you up for a nasty shock in a few decades. Saving up for your retirement should be a career-long endeavor—not something that you start once you hit a point in your 30’s. Instead of preparing yourself for failure, employ these retirement planning tips for millennials. When it’s time to enjoy your golden years, your foresight and responsibility will help you retire in comfort.
- Build your credit. This addition to our retirement planning tips for millennials may seem entirely out of left field, but it can actually make a huge difference. After all, credit is what lets you buy houses and cars. For many younger millennials, it also factors into the apartments that they can rent. If you have bad credit, you can get set in a cycle of financial difficulty. So, it’s wise to carefully build—and maintain—a good credit score. Otherwise, you may not be able to swing the retirement you’re hoping to enjoy—or the right home for your golden years.
- Make a savings plan. Now that you’re beginning your retirement journey, you may feel lost. After all, there’s so much to do! Make a savings plan for the next five years. Then, once you have your bearings, try and make a longer savings plan, ideally culminating in your retirement. If you need help, consult a trusted, retired family member or a financial advisor. Ultimately, this plan will help you stay on track, giving you a direct path to your main goal: retirement.
- Consider a Roth IRA. When is the best time for an adult to start contributing to an IRA? As soon as possible! For millennials, Roth IRAs in can particular can prove a huge blessing. Because you may need to withdraw early, a Roth IRA is often the best choice for millennials, as the withdrawals are usually not subject to taxes.
- Live somewhere with a low cost of living. Many millennials find themselves moving some place new, whether it’s across town or across the country. As you find your career and professional niche, considering residing in a place with a low cost of living. Not only will it be an optimal place for retirement, but it will help you live more frugally.
- Create a reserve of fallback money. Maybe your dentist found a cavity or your car broke down. You don’t want to withdraw from your retirement fund, savings, or IRA. Instead, you should have a reserve of fallback money from which you can draw. Aim to put a certain amount of your pay each month for this reserve—whatever you can feasibly afford. Then, if bad luck strikes, you won’t find yourself in such a dire situation.
- Grow your money. At Ty J. Young Inc., we help you grow your savings—money-protected. By starting early and working proactively, you can create a sizable nest egg.
Though you may have decades left in the work force, you’re earning the right to a smooth retirement. By following these retirement planning tips for millennials, you can make your journey even smoother. Taking little, gradual steps—and working to your goal over time—will help you responsibly plan for your future. Happy saving!
For a reputable team of advisors, call Ty J. Young Inc. at 877-912-1919. For more information on how to successfully retire, turn to our blog.