If you’re just out of college or are only working a part time job, retirement might be the furthest thing from your mind. Or perhaps you are 40 and starting to panic because retirement is just around the corner. Don’t worry. Here’s what to do.
If You’re in Your 20s
If you’re in your 20s, the best thing that you can do to ensure you won’t go broke before your retirement is to simply save money from month to month. The best rule to live by when you’re working part time or if you’re just out of school is to try to save $100 per month. This act will allow you to save over $1,000 your first year and will teach you how to budget correctly. A great tip for money saving in your 20s is to try to buy groceries as much as possible. Yes, it’s easier to buy Chinese takeout, but groceries are much cheaper. Also, take advantage of your neighborhood liquor store instead of buying drinks out at a bar. Don’t blow $12 on one drink, while a bottle of wine can be procured for only $8.
If You’re in Your 30s
If you’re in your 30s, try erasing your debt by paying off all of your small debt. By your 30s, you should not be paying off your huge debts first because this will leave you with no savings and no cash. Economic professors from North Western have actually found that by paying off small debts, you are more likely to become debt free along the line. So get rid of those credit card balances. You’ll be in a much better position if you do.
If You’re in Your 40s
If you’re in your 40s, you should build up the amount of cash and liquid money that you have. In an account, be sure to have at least six months of your income saved so that you can are covered in the event of an emergency. This money not only helps with any unexpected changes that might happen in your life, like health care or a job loss, but it will also put your mind at ease. And once you retire, if you’ve never had to touch this fund, you’ll have some extra cash.
If You’re in Your 50s
If you’re in your 50s, the key to a great retirement fund is to actually keep out of your 401(k). If you leave your 401(k) untouched from the age of 25 with a salary of $30,000 (which hopefully rises as you age) you could easily save up to $1 million dollars by the age of 65 by saving a steady 8% of your income in the fund. If you really need to take out loans by the time you are 50, take out a small loan, which will only drop your 401(k) marginally. This will ensure that you get a massive payout by the time you want to retire.