New College Grads: Prepare for Retirement Today
| 3 min read
- Make a budget – Start your future career by making and sticking to a budget. Try to save five to 10 percent of every paycheck.
- Get started by using tax-advantaged savings plans, including 401(k)s and IRAs – With company pension plans and Social Security disappearing from the savings equation, it is important to save for your own retirement through these investments. It is recommended, especially if you want to live comfortably, to have saved 70 percent of your annual pre-retirement income before you retire.
- Stay on top of credit card debt – Credit cards can be helpful, especially when you are on a tight budget, but avoid them if possible and try to pay off your balance in full every month to avoid high interest rates.
- Establish an emergency fund – You can plan ahead as much as you want for retirement, but it’s also important to be prepared for unexpected surprises that can happen on the road to it. That is why it is important to create an emergency fund so you can pay cash for unexpected car repairs or any other unanticipated expenses thrown in your path.
- Start saving just to save – Think about your future long-term. Despite having to pay immediate bills and school expenses, it is important to start thinking about where your money will be in the future. It is hard trying to balance out what you want versus what you need due to short-term gratification. But, in the long term, it is important to weigh out how your financial decisions will help you in the future.