When it comes to planning and saving for retirement, you must be consistent and save and invest every year. You also must be disciplined. Once you invest the money, you cannot touch it. Because of the power of compounding investment returns, contributing to your retirement every year and allowing it to grow are the keys to building your nest egg.
It is easier to put money away when you are young than when you have a mortgage or a family. Many of those that are just starting out in the workforce, however, face substantial headwinds: hefty student loan payments and high—and in some cases sky-high—housing costs.
Even with a tight budget, saving for the future must be a priority. Start saving for retirement through your employer as soon as possible and take advantage of corporate matches. Corporate matches are free money that helps boost your savings every year. Make sure to put away enough to take advantage of the full corporate match. Remember, contributions to employer-sponsored plans are not taxed, which is a bonus.
Contributing to your retirement plan every pay period is an easy way to save consistently. The funds never hit your bank account. Many refer to this as “paying yourself first.” Because you are ultimately responsible for your retirement, this practice has a long-term impact on your financial wellbeing.
