Retirement Savings Matters: Investing In Your 20’s
Nobody has to tell you that if you want to purchase a big ticket item such as a car or a home to save your money. More expensive items generally require some planning and savings before the purchase can be made. However, the most expensive purchase that most of will make in our lives is an afterthought for most- our retirement. Money invested today pays for your retirement and financial freedom tomorrow.
The best advice is to start young and get the retirement thing handled. If you start investing while your in your 20’s you’re way ahead of the game. Less than half of Americans have calculated how much money they need for retirement. Over 25% of the people who can contribute to a 401(k) plan never participate. The average American will spend at least 20 years in retirement.
Listed below are some tips that will help you retire early if you start saving and investing while in your 20’s:
Get Started Right Away
OK, You’ve got your college degree but your riddled with debt from those pesky student loans and credit cards. You’ve just been offered a job above the medium income range and the farthest thing from your mind is retirement but this is exactly what should be on the top of your “to do” list. Starting early and starting young make your saving and investing muscles strong.
Arm Yourself With The Right Information
Read up on the subject of various investments. Learn the importance of deferring your taxes until retirement age. Understand that you are now responsible for your financial well being and you’re failure to plan now could be disastrous. Don’t continue to go school to get advanced degrees just for the sake of it, weigh your options to see if your money could be better spent by investing. Learn about the beauty of a company sponsored 401(k) or a self-directed IRA.
Start Saving Now
Try setting aside at least 10% of your gross income each month and work yourself up to 30%. You’d be surprised to learn that you can just as easily live on 70% of your gross less taxes as you could 100%. Idiot-proof your 401(k) contributions by making them automatically deductible from your check.
Stick To Your Guns
Don’t be like many of your friends who will borrow against their 401(k) for a downpayment on a new home. Once you’ve set up a 401(k), don’t mess with it. Don’t just allow your investments to sit there either without doing a financial checkup. As you increase your knowledge about investments you may decide to move your money elsewhere to get better returns.
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