There are many reasons people put off saving for retirement; it’s hard to imagine your life 40 or 50 years into the future. But there are also many reasons to start saving as soon as possible. So what are the five steps young investors can take today? @Peter at @RichonPlanning breaks it down with @Erin Kennedy:
1. Track Your Budget: it’s important to know what’s coming in and what’s going out before you make any financial decisions
2. Set Aside Money for Big Expenses: would you like to save for a down payment? A wedding? A nice vacation?
3. Open a Roth account: you’ll probably never be in a lower tax bracket, so pay your taxes now!
4. Contribute to a 401(k): at least up to the company match
5. Focus on the Long Term: the sooner you start saving, the sooner you can reap the long-term reward of compound interest, which allows your principal investment to grow thanks to compounding dividends
And don’t forget to create that “emergency fund,” which should be 3-6 months’ worth of expenses.
