When Should You Start Planning for Retirement?
Most people start dreaming of retirement the moment they enter the workforce. This isn’t necessarily a bad thing. Even though they may have a lot of years ahead of them before they’ll get to enjoy not working, it’s good to start planning for the future.
By putting money aside from the moment you get your first paycheck, you can ensure that you’ll have funds waiting for you when you leave the workforce. Of course, how much you’ll have waiting will depend on where you save it.
Places to Save for Retirement
A lot of companies offer their employees a 401(k) or IRA to encourage them to save for retirement. More often than not, a person will put a certain percentage of their check into this account, and it will be invested in various funds, which (hopefully) will allow them to grow and earn interest.
This is one of the easiest ways to save for retirement because you have to do very little. The money is automatically taken out of your check and placed into an account. If you don’t see it, you’re not missing it. You should get reports every month that let you know how your money is doing, and if you want to add more or less to the investment, you can.
In addition to having a company-supported investment account, you may also choose to open your own retirement account. This can also be an IRA or a 401(k), but it wouldn’t be through your employer. When opening one of these accounts, it may be more work on your part because you’ll have to transfer the funds yourself. However, it could be beneficial if you move from job to job because then you won’t have to roll money over into a new account with each new company you work for.
You may also decide to open a savings account. This may not get you as much of a return on your investment as one of the other accounts, but it’s still a viable option. Savings accounts could be more protected than an investment account, where in addition to earning interest on investments, you can also lose money. Savings accounts are a bit more stable and aren’t impacted as much by the market. Doing what makes you comfortable and happy is important.
How Much Should You Save?
How much you need to save will depend on what you want to do after you retire. If you have dreams of traveling the world, that will cost more than staying at home taking care of the grandkids. No matter what you decide to do, you’ll want to ensure that you have the money to fulfill your dreams and live in comfort.
It may be a bit challenging to know in your 20s what you’ll be doing once you reach retirement age. It’s okay for you to change your plans as you get older, but starting to save as soon as possible for retirement will be incredibly beneficial.
It’s never too early to start thinking about retirement, and the sooner you can start saving, the better. For help with your retirement goals—no matter what age you are, contact Secure Choice LLC.
