In Your 20’s? Start Saving Now

Chances are that if you’re in your 20’s, you are not spending much time, if any, envisioning your ideal retirement. You are most likely focusing on paying your student loans, credit card debt, rent and other living expenses. So why worry about retirement when it’s a lifetime away?

The answer is simple. Because you have time on your side, anything you save today will have more time to potentially accumulate interest.

A few things to consider as you save for your retirement:

• Assess Your Situation. Before you do anything else, take time to evaluate your current situation. Do you like your job? Are you making enough money? Is there reason to believe you might get a raise; or on the flip side, be laid off? If you were to lose your job tomorrow, do you have enough money saved to keep you afloat? Depending on your answers, you may want to: look for other employment opportunities; building an emergency fund that could support six months of your living expenses; and/or create a budget that will allow you to live comfortably and save at the same time.
• Build a budget. Make an itemized list of all your debts and expenses, and stack them up against your total income. If you find that your debts and expenses are far less than your income, you should consider applying all of, or a portion of, the surplus to your retirement savings. On the other hand, if the total amount of debts and expenses exceed your income, you should consider cutting back on your spending, paying close attention to unwarranted excesses. For example: do you live with a roommate (or possibly your parents) instead of renting on your own? Do you really need to own that new car, or can you make do on foot, on a bike, public transportation or leasing?
• Tackle your debts. If you have credit card debt, student or car loans, it is important to pay them off as soon as possible to avoid high interest rate charges. Eliminating debt allows you to allocate that money toward future savings and a retirement income plan.
• Start saving. A good rule of thumb is to save a minimum of 15 percent of your annual gross income; putting a portion of it into an IRA retirement plan or long-term investment account that may grow over time. If your employer provides you with a 401(k) retirement plan, and matches your contributions to some degree, definitely take advantage of that.

By saving in your 20’s, you’ll be prepared for whatever life brings: be it marriage, children, a new home or vacations. Most importantly, you’ll be helping your future-self prepare for retirement.

SOURCES:

2016-21960

Gracio Garcia is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS) 160 Gould Street, Suite 310, Needham, MA 02494, (781) 449-4402. Securities products/services and advisory services are offered through PAS, a registered broker-dealer and investment advisor. Field Representative, The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian. The Bulfinch Group is not an affiliate or subsidiary of PAS or Guardian. Life insurance offered through The Bulfinch

Group Insurance Agency, LLC, an affiliate of The Bulfinch Group, LLC. The Bulfinch Group, LLC is not licensed to sell insurance.

PAS is a member FINRA, SIPC. 2016-28749. Exp 9/18