Most of us start out our young adult lives completely oblivious to how much money we’re going to need once we hit retirement. That’s an unfortunate fact because, let’s be honest, that time simply flies by.
As someone just over 50 years old, I have a lot of 20/20 hindsight and knowledge that I would love to be able to give my younger self. For those of you reading this blog today in your 20s, here are some of the tips and bits of advice that I would give myself if I only could. Enjoy.
Tip 1) If your employer has a 401(k) with a fund matching program, make sure you take full advantage of it. If, for example, they match 50% of what you put in up to $5000, do your very best to put that $5000 in so that you get the $2500 that they are giving you for free.
Tip 2) Start working with a financial advisor. If you do some research, ask for recommendations and (hopefully) find yourself an excellent financial advisor, stick with that person and get their advice during your entire career. The advice that they give you, and the decisions that it will help you to make, will make a world of difference in how much money you have when you finally do retire.
Tip 3) Talk to your significant other about retirement, and start doing some planning. Many young people are so caught up in starting a family, getting their career off the ground and, let’s be honest, having a good time, that they don’t talk at all about retirement and, even worse, make no plans for it. It’s absolutely imperative that you talk about retirement because, in most cases, that talking leads to action and that action leads to having a nice nest egg when you finally reach your golden years.
Tip 4) Save, save, save. Make sure to save as much money as you possibly can. Have it automatically withdrawn from your paycheck, and have money automatically withdrawn to be put into your 401(k), IRA or other retirement savings plan. The more you save when you’re younger, the more time that money will have to grow using the power of compound interest.
Tip 5) Stay healthy. I have seen many of my colleagues, family members and friends suffer both physically and financially because they simply didn’t take care of themselves. Regular exercise, drinking plenty of water, eating healthy food and doing things that make you happy and less stressed out are vitally important. Not only will they make your life easier when you’re older but you won’t spend all of your retirement savings on doctor bills.