Hey, this is Chris with Money Burst, and one thing that I've learned after talking about money for all of these years is that most of us have absolutely no idea what we should be doing when it comes to planning for retirement. So, I decided to put together this new series just for you.
I'm going to break down, decade by decade, what you should be doing to get ready to retire. So, let's kick things off with your 20s.
Now I know your 20s can be a challenging time financially, I have 100% been there. You know, you got student loans to think about, high rent, low pay. Sometimes it feels like a victory just to pay all of your bills on time each month. But don't be so hard on yourself about this. You know, this is a time to just be setting the groundwork for your financial future, even if you can only spare a small amount of money each month. Remember, thanks to the magic of compound interest, every dollar that you save now can grow significantly over time. So even if you just start with 1% of your paycheck, start investing something. And if you can afford more, aim for that 10 to 15% mark.
Now, if your job offers a 401k plan, start contributing now. Especially if they offer any type of matching contribution. It may be tempting to just opt out and not put anything in, but this is basically free money towards your retirement, so don't leave any of that on the table.
In your 20s, you're in a position to be a bit more aggressive with the way you invest, so I want you to look into low-cost index funds that invest a large portion of your money into stocks. And this is because you have the time to ride out any rough periods in the stock market. So don't let a little bit of risk scare you.
I want you to remember that in your 20s the goal is simply to just get started. It's not about how much money you save, but that you actually get started saving. Because the earlier you begin the more time your money has to grow.