How Should Millennials Start Saving?
Here are a few good retirement savings tips:
- Aim to pay off all high-cost debt first to avoid expensive interest payments.
- Get a 401k match from your employer if it is offered.
- Save your raises and bonuses and continue living on your lower income.
- Put money into an IRA automatically.
- Aim to allocate 15 percent of your paycheck into retirement savings.
If this all seems insurmountable, just remember that setting aside even a small amount of each paycheck will pay off later. For example, $25 a week invested at 5 percent interest for 40 years can grow to more than $156,000. And when it comes to capitalizing on the power of compound interest, the sooner you start saving, the better.
Next Up: Millennial Money Traps and How to Avoid Them