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Let’s face it, you probably don’t think too much about saving for your mid-sixties. The good news is you’re not alone: 1 in 3 Americans have zero saved for retirement. The bad news? The less you save now, the more you’ll ultimately have to fork over later.

Whether you’ve got a stable 9-5 with full benefits, or you’re enjoying the flexibility of working as a consultant while you’re still figuring your career out, if you’re making money, you are more than capable of saving for retirement—now.

How Early is “early” Retirement?

The main reason it makes sense to start saving early, aka your mid-twenties, is because the longer you save, the more compounded that money will be. This means that you won’t have to take out larger chunks of money from your income later in life, because money put into a long term investment like your company’s 401k or an IRA, will collect interest over time. There are even calculators to show you just how thick that cash cushion could be.

Life only gets busier and more expensive as you get older and start to save for the big stuff. So it makes perfect sense to take a little bit out of your income for retirement starting today in order to plan for how much additional money you’ll need save for the big things in life like a house and kids (and maybe a model 4 Tesla).

But I Still Have Loans

Probably the most common reaction that young working adults have regarding saving for retirement is “how can I possibly think about that while I’m still paying off student loans?” This is certainly a valid question. However, there is always the option to refinance your student loans if you have a good credit score. Also, guess what? There’s no minimum dollar requirement to open up most IRAs, so why not just start with a small amount and work your way up to saving more once those loans are paid off? Kind of a no-brainer.

Different Than Putting Money in a Savings Account

Retirement savings is not the same as cash savings. Cash savings should be viewed as more “short term,” like saving up a good chunk of change as a buffer in case you’re laid off, or for that 30th birthday trip to New York. When you think of retirement savings, think super long term—like when you want to quit your job at age 65 and travel the world with your spouse.

Take the Plunge and Explore a Little

You won’t regret at least looking into your retirement saving options. There are so many different ways to invest those dollars, so explore a little. While it’s great to consider your company’s 401k because that will likely match what you contribute (usually about 3-6% of what you make), don’t be shy about investing in an IRA or another investment opportunity unique to your line of work. To name a few, teachers have what’s called a 403b and small business owners can’t go wrong with the easy-to-open SEP IRA.

Whether you’re fresh out of college and are overwhelmed by the prospect of saving for the long haul or you’re in your mid-thirties and feeling guilty for neglecting this, don’t sweat it! Start now. That annual investment you started early on will make money off of itself without you having to do a thing.

And they said money doesn’t grow on trees.

 

What Millennials Need to Know About Planning for Retirement (read)

How Much Do I Need to Retire?

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