Unless you’re fabulously wealthy or planning to work until the day you die, you’ve probably been thinking about retirement. The world is a big, crazy place, but one day you’ll need to hang up your hat and retire from your job to enjoy the golden years of your life. And, if you want to do that comfortably, you’ll need to have a bit of money saved up.
However, many people don’t realize that there are some basics they need to know even in their 20s and 30s about retirement investing.
It’s not something to only think about when you hit 40 or 45: when you’re first getting started working, it’s time to start saving for retirement. Here are some tips for investing in your future you’ll wish you’d heard sooner.
Start Saving Today
It quite literally doesn’t matter how old you are or how much money you make: It’s a good idea to start saving today. Seriously, today. If you’re not putting any money back for your retirement right now, you’re doing yourself a disservice.
You do not want to be working into your 70s and 80s. Trust us on this one. The sooner you get some savings invested in a 401K, the sooner those savings begin accruing interest for you.
That interest is vital: it’s the main place your retirement savings will come from down the line. And, the longer that money gets to spend making you interest, the more return you’ll see when you retire.
It’s simple math: as you save more, you earn more that goes back into your savings. The best part is, it isn’t taxed until you take it out of the account. This allows your money to make the most interest up-front before being taxed when you tap it during your retirement.
Meet the Match
If your employer matches 401K contributions from your paycheck, do yourself a favor and max out that match. If they match five percent, put your contributions to five percent.
Doing anything less is literally leaving money on the table that you could instead be banking. Your retirement isn’t going to be fully covered by Social Security, you’re going to need some help from your savings to make your retirement comfortable.
Meeting the employer match is a great way to “set it and forget it” when it comes to your retirement savings. Just max out the match and let your account grow while you’re working. Before you know it, when the day comes to retire, you’ll be glad you’ve got that money stashed away.