Simple ways millennials can save for retirement
Is there a right time to start saving for retirement?
Retirement seems like something that is decades away, but it is coming up sooner than you think! Most 30-somethings might push off the thought of retirement because the thought of saving for retirement is daunting and a bit confusing. It doesn’t have to be that way. We are going to break down some easy ways to prepare yourself now so your “future-self” will thank you.
A 401(k) is a tax-advantaged way to save for the future.
An easy way to save is with your employer-sponsored 401(k) plan. A 401(k) is a tax-advantaged savings plan where employees can deduct a portion of their salary from each paycheck and have it invested. Typically, employers will contribute a certain percentage to the plan, and it is often referred to as a company match, but it is important to check the details. The money in the 401(k) plan may be able to grow tax-deferred or tax-free.
How do you set up a 401(k)?
When you start a job, part of your onboarding materials should explain how to enroll in a 401(k) plan. It can vary with each employer, but employees can have the money deducted automatically and deposited into a 401(k) account. The account will accrue with every paycheck and develop a healthy retirement fund for the future. Be sure to confirm with your employer if you have questions about the specifics of your plan.
Is there an alternative to a 401(k)?
What do you do if your employer does not offer, or match contributions to, a 401(k)? Consider an IRA as an alternative. An IRA is an individual retirement account that allows eligible participants to benefit from a tax advantaged account to save for retirement. With an IRA, your money can accrue tax-free or tax-deferred until retirement.
Don’t wait to save. Saving for retirement has never been easier to set up and the earlier you get started, the better! If you have questions, contact us.