3 Strategies to Save Early and Beat Old Man Time to Retirement

Saving for retirement is one of the hardest things young adults face today. By the time you save for a down payment on a house, buy a car, pay off students loans, and take that vacation you are in desperate need of, there isn’t a lot of loose change lying around to put into your retirement piggy bank. The truth is that those retirement pennies can add up given enough time.

Knowing how to start savings those pennies may seem overwhelming, but here are a few simple steps to get you started.

Investigate your employer sponsored retirement plan and matching contributions.

Many employers offer a 401K retirement savings plan. You determine how much you want to contribute each pay period and it is automatically deducted from your paycheck. It makes contributing to your retirement plan easy.
Additionally, many employers will match your contribution up to a certain amount. For example, if you contribute at least 6% of your income, they will kick in an additional 3%. If your employer offers a matching contribution and you still aren’t contributing, imagine having a money tree growing in your back yard and just admiring it from the kitchen window. It’s free money! Even if you can’t contribute the full amount to get the entire company match, contribute all that you can to get at least some employer match and take advantage of this employee benefit.

Open an Individual Retirement Account (IRA).

If you are self-employed or your employer doesn’t offer a retirement savings plan, consider opening an IRA. IRAs can be opened at a bank or trusted investment firm. Determine the amount you want to contribute each pay period. Set up an automatic transfer through your bank or payroll department. It is easier to stick with your plan when you don’t have to think about it each time.

Schedule an appointment with a Financial Planner.

Many financial experts will offer at least one free consultation even if you aren’t a current customer. Many financial institutions have partnerships with credible investment firms who can help. One appointment can help you gather information that can help you determine the value of saving now and what type of plan best works for you.
Consider your short-term and long-term financial goals, like that down payment for a house or summer vacation. Jot those down along with questions to ask. What is the value of starting a retirement savings plan at this stage in life? What is the tax and other benefits obtained by contributing to a savings plan? What options are available? What is the level of risk and reward for each option? What happens if you change jobs? What if you need to access the funds early for an emergency? How can you determine what you can realistically afford to save?
Planning for retirement at any stage of life can be overwhelming. Asking for help, starting small, and keeping at it over the years can turn what seems like loose change you start with into a comfortable retirement nest egg.