Generation Y’s Guide to Saving for Retirement
Generation Y (The Millenials), by broad definition, is comprised of those born in the 80s through early 2000s—and the very thought of retirement plan savings at our age can be daunting. Right off the bat, the same fears are dug up, time and time again; fear of money loss, fear of misdirection, pushing away tomorrow’s retirement in lieu of today’s excitement.
We’re a part of a generation that challenges the status quo and asks questions. We’re part of a generation that demands equality regardless of tenure. We’re also part of a generation that watched the economy drop out from beneath us. We’re a generation that cannot afford to ignore retirement planning.
So how can we move forward, and still balance fun spending with saving for our golden years? These easy tips will get you started on the road to investment.
A Little Goes a Long Way There are no rules that say you have to move a huge amount monthly, or per paycheck into savings. You can automate your payments per check—even if it’s just $25 per paycheck. Whatever you can manage is better than nothing. As for Next Generation Trust Services’ part, we expect to have incoming direct deposits functional during our first quarter, so that you can make your contributions with relative ease.
Pay Yourself First It’s easy to find yourself without any savings if you make it the last priority. It’s amazing what you can learn to do without (or not even notice is missing) if you put savings away first, instead of trying to put “extra” into savings.
Bank Your Bonuses Any extra earnings that flow your way, whether it’s a company bonus, a few bucks from a scratch-off, your tax refund or some unexpected birthday money—bank it. Even if you can’t put away all of it, put away half; you weren’t counting on it, so you won’t miss it.
Open a Roth IRA Tax free earnings is not just a buzzword, it’s a money saver, and the income limitation is over $100,000, so most people are eligible. Not to mention, that anything that you put in (out of pocket contributions) you can take back out without penalty or tax. Whereas it’s preferable to keep it in the plan where it makes tax free money, it’s truly an emergency fund.
Budget, Budget, Budget—Reward Plain and simple, if you want to save money, you have to spend less than you earn and there is no way to know that if you don’t track. Writing out a budget can seem like a major downer as you watch where your money actually goes, but by setting yourself budgeting goals, you can control your spending and reward yourself for a job well done. For example: Your weekly grocery budget is $80. If you come in under $70, you get a $5 splurge from the bakery. Total cost is still below budget; you save at least $5 and treat yourself at the same time. Win-win.
Take Advantage of Social Media Use Twitter, Facebook and LinkedIn to follow and like professionals that have done it all before. People are chock full of information for you; use the internet as the learning tool to get a grip on learning how to invest and find reliable information. You can follow @NextGenTrust on Twitter for tips and updates. OnlineSchools.com has a list of 100 Best Twitter Feeds for your Financial Intelligence, and there are plenty more resources for you out there.
These are just a few tips for the Boomer’s Babies on getting started in the financial world that seems to be filled with pitfalls and snags and mountains to climb—but what is life without a sense of adventure?