Waiting until you're 30 to start putting aside money when you could have started at age 25 could mean 20% less in savings when the time comes due to compounding interest and value appreciation, says Walter Updegrave, editor of RealDealRetirement.com. If you wait until age 35, you could be missing out on 40%. And it's even more important to get started early for millennials because ...
You face greater challenges: Perhaps you've noticed that five- to six-figure college debt you've accumulated. Or those ridiculous housing prices. "They're having a hard time balancing (retirement savings) with paying down student loans and paying for a house," said Michael Solari, principal at Solari Financial, a financial planner based in Bedford, N.H.
These are issues other generations didn't experience to the same degree as you. All the more reason to get going, planners say. "Do what you can, then every year up it 1%," Solari said.
Don't rely on Social Security: Planners say it's a misnomer that Social Security won't be there for millennials. It'll still be there, but it may not be in the same form, and it may get a little haircut by then. The key is that you can plan on it being there, but don't use it as a crutch. And pensions? What are those?
Get that 401(k) and/or IRA going, and at the very least, save what it takes in order to get the maximum match from your company; otherwise you're giving away free money. Index funds, exchange traded funds, mutual funds and the like are solid investment vehicles. Plus, creating a health savings account that invests your money could give you tax-free benefits in retirement.
Get advice, from anywhere and everywhere: Remember that little financial crisis your parents braved through in 2008-09? Think of it as a learning experience and get advice from them on how to sidestep that, says Andrew Meadows, vice president for brand and culture at Ubiquity Retirement + Savings.
Also, though, it helps to get traditional advice. Mutual fund companies, stock brokerages and financial advisors have plenty of tools to get you started.
Want a more automated approach? Take a look at robo-advisors, such as Betterment and Wealthfront are two big ones.
One possible avenue is your local bank. If they see you're interested in getting financial advice from them, and prove to be a loyal customer, it may be easier to get credit from them. "These advisors should be similar to you," Meadows said. "They should be easy to talk to."
Visit the toolbox: There are countless retirement calculators and other digital tools online that can help with planning, advisors say. Take advantage of them.
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