For millennials, it’s easy to ignore the fact that retirement looms in the distance. We’re trying to find stability, grow our careers and overall build a future for ourselves. And part of that future includes retirement. Sure, it might be more than a few years down the line, but we’ve also been taught that the sooner you prepare for that fateful day, the better off you’ll be. Many of us can’t rely on pensions like many baby boomers, and the national social security outlook is pretty bleak.
So, even if you think you’re the furthest thing from ready to plan your retirement, there are some simple steps that any millennial can (and should) take to be aware, proactive and prepared for retirement. Check them out below!
1. Figure out about how much you’ll want to save for retirement.
Check out these retirement calculators from AARP to see if you’re saving enough (or planning to save enough). Although thinking and talking about money can be difficult, it’s necessary to have a realistic view of your financial situation and make a plan for what you want.
2. See if your company has a 401(k) plan
If they do, contribute at least enough to meet the employer match minimum. If you have multiple 401(k) plans from previous employers, instead of trying to maintain them all, roll over your money into one.
3. If that’s not an option for you, open an IRA
Individual retirement accounts (IRAs) let you save money for retirement in a tax-advantaged way. You can even set up an automated contribution that you’re comfortable with. IRAs are great options for the self-employed.
4. Cut one frivolous purchase a week
Outside of your normal savings, see if you can’t turn down one of your trips to your favorite chain coffee shop. These small purchases add up quickly, and those habits will help you grow your savings even quicker.
5. Redirect old bills to new strategies
Did you just pay off your car? Done paying off an old credit card or nearing the end of your student-loan road? Instead of going on a shopping spree with your new extra cash, keep your budget the same, at least for a while, and pour that extra cash into your savings accounts. You’ll benefit greatly from these small gestures.
6. Find a retirement buddy
Kind of like an accountability partner for the gym, it’s a smart idea to find someone who has similar goals to you, a financial advisor or a family member who will motivate you to stay on track, give you advice on certain topics and help you plan your next steps. You don’t have to feel alone or ashamed to talk about saving for retirement. Being aware and aggressive toward your goals will only bring positive things.
7. Tighten up one of your budget categories
If you don’t have a working budget, step one is to make one. Then, let’s take a closer look at each category. Where can you cut things down? Don’t worry about cutting your costs by a lot.10% difference is a liveable change for you, but will make a major difference in the long run.
Have you tried all or some of the tips above? Retirement doesn’t have to be scary, and planning shouldn’t give you anxiety. Millennials have the advantage of time. If you start now, your later years will be free of worry. What strategies are you employing to prepare for your retirement? Share them with us in the comments below!
This post is brought to you in collaboration with AARP.
