What Millennials Need to Know About Retirement

Millennials everywhere are beginning to start saving money for retirement. You may think that retirement is too far away, that you can save starting next year, or start saving when you have a better job. However, millennials are in the best position right now to make sure that their retirement is the most profitable. If you start saving now, the compound interest that you will gain will be incredibly helpful. Here are some things that you as a millennial can keep in mind for retirement.

Max out your employer’s 401(k) match plan

If you currently have a job that offers a 401(k) plan, be sure to check it out. Most employers will match at the very least some of the contributions that you have made. In layman’s terms, this means that if you’ve made some contributions to your retirement plan, your employer will match it. The best thing that you can do is to check with your employer’s HR department to see what, if any, your company may offer. In general, your employer will match up to a certain amount, so you’re going to want to make sure you’re contributing at least that much during the year.

Consider opening a Roth account

When looking at accounts to open, you may know about traditional 401(k)s and IRAs that allow you to contribute money to your retirement fund tax-free. Generally, the money for your 401(k) comes out of your paycheck before taxes, and with the IRA, you can deduct the contributions that you make. Unfortunately, you will have to deduct taxes to pay for the expenses that you rack up when taking the money out.

However, there is a way around this. A Roth IRA works in the opposite direction. When you put money into the account, you pay taxes. Assuming you meet the necessary qualifications, when you withdraw the money, you don’t have to pay taxes. Roth accounts are an ideal account for people who are just starting out in their career, as they’re most likely earning less money now than they may be when it’s time to withdraw the money. Get taxed now, and you don’t have to worry about it later.

Have some non-retirement savings

The thing to remember is that life is going to happen, whether you like it or not. Your car may break down, you may need a procedure, or you may have a family emergency. Unfortunately, these things aren’t free. You’re going to need money to pay for them. The last thing that you want to do is to have to take money that you were setting aside for retirement to pay for those emergencies. Keep your funds safe by setting aside money for emergencies that aren’t in your retirement account.

This blog/website is only made available for educational purposes. It is designed to give visitors general information and a general understanding of select financial topics. It is not intended to provide specific financial or investment advice. Conduct your own due diligence or consult a licensed financial advisor/broker before making any and all financial/investment decisions.

ABOUT BROOKLYNN CHANDLER WILLY

At Texas Financial Advisory, Brooklynn Chandler Willy and the entire team understand and appreciate how hard their clients work and the nest eggs that they’ve saved throughout their lives. The team will work with each client as a fiduciary and help take the uncertainty and stress out of retirement planning to create holistic plans that extend beyond the numbers. To learn more about if Texas Financial Advisory is right for you, please visit their website.

Alongside her job as the Host of the “Texas Financial Advisory Show,” Brooklynn Chandler Willy hosts the “Texas Financial Advisory Show,” airing weekends on WOAI 1200 AM and KTSA 550 AM. Through her show, Brooklynn shares the knowledge, insight, and expertise that she’s accumulated across her career. Listeners tune in to hear examples of how a retirement income plan can help reduce income taxes, provide a legacy for heirs, and assure a steady income through the rest of life.