Finance Globe
3 Ways to Get Retirement Right in your 20’s
It can be difficult to think about retirement when you are in your 20’s. After all, you have quite a few years to go before you hang up your work boots for good.
As tempted as you may be to put this off, now is the time to get serious about saving. If you make sound decisions in your 20’s, you will find yourself in better position over the next three to four decades.
Here are three ways to get retirement right in your 20’s:
1. Develop good savings habits. Even if you don’t earn a lot of money, you can still develop the habit of saving for retirement.
Regardless of how much money you can save each month, make sure it is something. This will get you into the habit of saving, which will come in handy when you are able to contribute more in the future.
2. Keep it simple. There are many types of investments to consider, some of which are too confusing and advanced for somebody in your position. You should look into all your options, but keeping things simple for the time being would be in your best interest.
For example, an IRA or 401(k) is simple to setup and understand.
3. Be careful of who you trust. There are many companies and “advisors” who want to help you save for retirement. And guess what? They also want to charge you for their guidance and advice.
There is nothing wrong with seeking the help of a professional, but make sure you know this person inside and out. How much do they charge? What is their background? Can they provide references?
With these three points guiding you, getting retirement right in your 20’s is possible. By doing so, you are setting yourself up for a better future.
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3 additional recommendations
1) Focus on low-cost investments. This would include ETFs, inexpensive mutual funds, etc. Over time, this can save you hundreds of thousands of dollars.
2) Focus on long-term. You are in your 20s, time is your biggest asset. You don't have to pick the hottest investments to see your retirement grow. Focus on investing for 20, 30, 40, and 50 years, and choose investments based on those time horizons.
3) Research and understand what retirement savings involves. Information on retirement can seem overwhelming as there is so much information out there. It also seems like a million years away. If you spend the time early on in your life, the easier it will get. Spend time on it early and you will see the dividends.
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