The topic of retirement is always hotly contested, but one of the key points within that discussion centers on age, more specifically when you should be thinking about saving for your post work activities.
Retirement isn’t something on the minds of men and women in their 20s, perhaps starting out on their own for the first time, buying that first car or renting that first apartment. They also may be in the midst of nailing down that first “real” job, the one that requires you to wear dress clothes every day and you even get your own desk or cubicle area.
And with that real job comes a real paycheck and more incentive that retirement only starts in your mid to late 30s as far as saving for it is just a myth.
The truth is saving for retirement is a young person’s game and, if nothing else, should be on your radar when all those “firsts” are coming in your 20s. Now, that doesn’t mean you need to dump a max amount into a company offered 401K or begin an IRA with all your chips and every dollar of your paycheck on the table. What it means is you should start contributing in small doses when you’re in your 20s, particularly on the 401K side when the company may be matching you dollar for dollar. That’s free money on the table, which should translate no matter what your age.
In addition to saving via the 401K or IRA route, your 20s also should be a time, as far as retirement is concerned, for saving money in general above and beyond the more conventional retirement paths. If you think about your 20s, you probably aren’t buying your dream house or a new car, so living modestly means you can have the things you want for a reasonable price and take what is leftover and put it in a savings account for a much needed emergency fund that will come in handy not only when you retire but as you become a homeowner or need money for the unexpected repairs and life events headed your way.
Having a budget will help your cause but more so will not neglecting retirement or putting it off for later in life. The sooner you react to putting money aside, the less you’ll have to scramble at the 11th hour to get to a financial position you’ll feel comfortable with when you finally call it
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