How to Save for Retirement When You're Young

When you're young, it feels like you have nothing but time to do whatever you want. The younger you are, the further out the idea of retiring one day is. However, even if you're only in your early twenties, it's never too early to plan for your future. There will come a time when it's time to hang up the uniform, which means you won't have a primary income stream to fall back on. To make sure you're set for your golden years, now's the time to start saving up for your retirement. In this article, we'll be providing you with everything you need to save for your retirement, and why you need to start now.


Invest in Real Estate

Investing in real estate is one of the best ways to secure your future. There's usually a need for rental properties, especially in areas that are popular vacation spots. Even if it's just a studio or one bedroom, you can look for one that's needs work and do as much as you can yourself. Once renovated, you can rent it out during peak season to maximize your ROI. Investing or buying real estate can also help you in case there's a recession. If you're not sure how a recession can affect your financial security, you can review a guide that outlines everything you need to know. That way, you'll be prepared when a recession strikes. Recessions can cause severe issues if you're not prepared.


Don't Count on Social Security

Your grandparents worked their entire life to retire and reap the fruits of their labor. Specifically, they received Social Security payments each month and probably seemed to be doing well. However, things aren't like they used to be. Social Security payments are expected as time goes by. What's worse is that most people only get about 40 percent of their monthly income, so that might not even cover all your bills. That's why you need to start saving as early as you can and find ways to make as much money as possible when you're young.


Automate Your Savings

Once you're earning enough, you need to automate your savings. You ask your employer to automatically deduct a certain amount each month and put in an IRA, or you can find one you want to contribute to. If it's matched by your employer, save as much as possible.


Look for a Job with Retirement Benefits

There are some careers that offer their workers retirement benefits to help set them up for their golden years. Below is a quick list of jobs that typically come with these benefits:


·         Medical staff

·         Teachers

·         Construction workers

·         Police work

·         Being enlisted in the army

·         Transportation worker


You'll know if a job has these benefits by thoroughly researching the description. One thing to note is that you need to be really scrutinous about which job you're looking at. Not every career comes with 401k or 403(b) plans. In addition, make sure to consult the employer for more details about these benefits. If they refuse to elaborate on the details or no longer take part, keep looking.


Open an IRA

An individual retirement account (IRA) is a tax-advantage savings account where the funds you deposit is tax deferred. Tax deferment means that anything you put into an account isn't affected by taxes. This is a critical piece of any successful investment journey and you'll also be able to write off what you put in the account on your taxes when the season hits. Something we need to bring up, however, is that when you eventually withdraw your funds, the taxes will be deducted accordingly.


Build Your Emergency Fund

An emergency fund is separate from your primary finances and is used only to handle problematic situations. This is especially important in retirement when there's no income to fall back on. Like a retirement account, you need to contribute all funds you can for as long as you work. The same applies if you have any passive income. You never know when you or a family member needs medical attention, your car may break down suddenly or you need emergency home repairs. It's recommended you put at least 20 percent of your primary income to your emergency fund.

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