5 Ways To Set Yourself Up For Retirement In Your 20s
The sooner you start planning for your retirement, the more you will be able to take advantage of compound interest. Your 20s are a great time to start figuring you your different investment strategies when it comes to your retirement. It can be hard to get into retirement planning in your 20s if you have no prior experience saving or investing. However, once you start researching the different methods of retirement planning, you will have a new found confidence in your financial future. Setting yourself up for retirement in your 20s is a great way to get the ball rolling early and start your journey to retirement on the right foot.
Automate your retirement planning
When you are trying to save your money for retirement, it can be difficult to always be disciplined with your money. For the first time in your life, you now have a substantial income which is very enticing. Buying new cars and taking vacations can seem like a fun thing to do, but it leaves very little money left at the end of the year for savings. It is important to put your saving on autopilot if you want to make a big different in your financial future.
Contacting the payroll department of the company you work for is a great place to start. The professionals working in the payroll department will be more than willing to walk you through the steps of auto deposits. You can decide what portion of your check every month is going to go into retirement planning. This makes saving for retirement so much easier. Every month the money will be taken out of your paycheck without you even knowing. This will force you to live on a smaller budget and make the appropriate lifestyle changes that you need in order to start planning for your retirement.
Maximize your earnings
Finding the best paying job for your skill set early on is going to make a big difference. If you start at the age of 25, an extra $5,000 a year ends up being an extra $634,000 in earnings over your lifetime. These extra earnings alone will be very beneficial to the future of your savings. When you are looking for that raise, make sure that you are asking your employer at the right time. Don’t wait until it is time for a review to ask for a raise. Take advantage of opportunities when you have recently completed a project or otherwise excelled in your position.
It is important for you to make the most out of your skills. Branding yourself in your industry is going to be crucial to earning the amount of money that will help you save for retirement. Using social media to accentuate your career highlights is a very wise thing to do. Linkedin is the social media network of choice for professionals today. Having an impressive profile on Linkedin will raise your value and help employers see your worth as a member of their organization.
Seek investment help from financial professionals
Making advanced investing decisions for your retirement can be a very difficult thing to do. When you are spending most of your time working on your career in an industry that is far removed from finance, you may lack the skills needed to properly plan for your future. This is why it is important to seek out a financial adviser who specializes in retirement planning. These professionals have years of experience helping individuals plan for their financial futures.
Picking the right financial planner is a very important and tricky thing to do. There are far too many stories in the news of financial planners who were not diligent with their client’s investments and ended up making poor financial decisions in the long run. It is important to meet with many different financial professionals before deciding which adviser is going to be the right fit for you. Don’t rush when you are choosing an adviser as this is going to be one of the most important decisions for your financial future.
Create great saving habits
Learning how to save is something that doesn’t happen overnight. Most of us have learned from our parents or friends how to spend. We have never had many great role models who have taught us how to save. However, there is no time like the present to start learning how to save. Start finding many different opportunities to save. When you save small amounts of money on a regular basis, you will find that habits start to form. You will quickly realize that there are many of your old spending habits that just don’t make sense anymore. Eating out, going on random road trips, buying the latest electronics, and going on shopping sprees at the mall will all seem like irresponsible things to do financially once you start living with a saving mindset.
New habits take time to build. Don’t feel discouraged if you are having trouble saving early on. The more you save, the easier it will become. You will start to see your savings build and this will motivate you to keep on your pathway to financial greatness.
Look for investment options with low fees and employers with great benefits
Planning for your retirement can be a costly thing to do. Financial professionals have to make a living just like anyone else. While this is true, you want to avoid investing in funds that will eat up your gains with fees. These fees can really cut into the interest that would help your portfolio grow over the years.
It is important to do your research when looking for different investment options in order to avoid these fees. If your employer offers retirement matching, take advantage of this. This can all but eliminate the fees that you would have to otherwise deal with. Retirement matching is one of the most useful things in the investment world. When searching for your ideal work situation, finding a company that will match your retirement spending should be a key issue to take into consideration.
