Did you know that 66 percent of millennials do not have any money saved for retirement? That number comes from a report by the National Institute on Retirement Security, and it also says only a third of that generation even participates in employer-sponsored 401(k) plans. Those facts make the retirement outlook a little rough, but there are ways to get on the right track.
Pay Off Your Student Loans But Not At the Expense of Your Retirement
Like many other millenials who are recent graduates, you may find yourself in a position where you need to pay off student loans. Obviously, you will want to get that done, but be sure you consider your interest rates. If you have a relatively low-interest rate for your student loans and may be able to earn a fair amount of interest with a retirement account, you might consider putting a little bit less money toward your student loans a month and a little bit more toward your retirement account.
Figure Out Ways to Cut Spending
If you want to capitalize on how much money you have in your retirement account, you need to start young. That means finding ways to cut your spending. You could start with using an app like Mint to track spending. It will show you where all your money is going and see where you might be able to cut unnecessary expenses. It's important to remember that even small changes can help you stash away more money. For example, even if you save $25 more a month, that is $300 more a year. Plus, you should remember that you will earn interest on that money, so your $25 a month will actually end up being a lot more by the time you're ready to retire.
Take Advantage of Retirement Matching with Your Employer
If you have an employer match for your retirement account at work, you will want to take full advantage of that. As my dad says, matching is like free money. For example, if you put in 3 percent of your salary and your employer matches 3 percent, just making that contribution will double your money right off the bat. Even the smallest amount put toward your retirement account will mean a big difference in your retirement savings years down the road.