When you are in your 20s, retirement can seem far away. Immediate matters like car loans, student loans, and credit card debt may be on top of your list of worries, and by the time you get to your late 30s, you will be thinking about raising children or buying a house of your own.
So, when do you get time to think about retirement?
Your 20s are the best time to invest in your retirement because a little bit can go a long way too. Your savings, coupled with compound interest, can go a long way and provide you with a comfortable cushion by the time you are ready to retire.
William schantz Explains How to Plan for Retirement in Your 20s
Planning for retirement in your 20s does not have to be complicated. Here are some tips by William schantz:
Don’t Think; Just Start
William schantz believes the hardest step in saving for retirement is starting. Once you start, it becomes easier. The best way to put yourself into the habit is by sending a percentage of your monthly salary into a retirement account each time you are paid.
You do not have to spend too much- the smallest amount can reap huge rewards in the long run. For example, you can send $50 to your retirement account between the ages of 25 to 60. So, in 35 years, you will have a sum of $21,000 in savings.
An average return of 8 percent can turn into $200,000 or more based on where you invest- 401(k) plan account, individual retirement account (IRA), or alternate retirement plans- you have plenty of options to choose from.
Get a Job With Retirement Benefits
Do not underestimate the importance of retirement benefits in your career. According to William schantz’s research, these contributions or a 401(k)-match can offer the best return on investment, allowing you to double your money in a short period of time.
You should also focus on when to vest these benefits. While your 20s will be full of career opportunities, sticking to one job till you can retain employer contributions to your retirement plan is a smart way of planning for the future.
Allow Money to Go Directly into Your Retirement Account
If the company you work at offers automatic payroll deduction, decide a percentage of your income that should go towards your retirement savings.
As humans, we are greedy by nature and may completely forget about saving for the future when money is transferred to our accounts. However, automatic payments will allow you to be less tempted to blow off the money in a single week.
If the company you work at does not offer payroll deductions, William schantz suggests that you set up an automatic transfer from your savings account to your retirement account.
William schantz’s Concluding Thoughts
When it comes to retirement planning, remember that you are playing the long game. Investing for retirement does not mean setting money aside, but instead, finding ways to help triple your money.