Gen Z: 5 Things You Must Do Now To Retire at 62
Written by
Adam Palasciano
Edited by
Nicholas Morine
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Generation Z, the oldest of whom are now turning 26, are finishing school and embarking on their career paths.
Business Insider explained that as more Gen Zers enter the job market, the group’s collective annual income is expected to hit $33 trillion globally by 2030. By 2031, they’re projected to surpass the collective annual income of millennials.
Overall, Gen Zers seem to be more cautious and are preparing for their financial futures earlier than their older counterparts. A recent CFA Institute survey revealed that four-in-five (roughly 82%) Gen Z investors surveyed in the U.S. say they began investing before they turned 21.
While this is a promising statistic, here are five things all Gen Zers must do now to retire by age 62.
5 Things To Do To Retire By 62
- Invest early and often: Investing early and often is crucial to ensure a financially secure retirement. The earlier you start investing, the longer you can take advantage of the magic of compound interest. Your money will grow over decades and you’ll earn interest on interest, resulting in significant wealth accumulation.
- Invest money using a Roth IRA: A Roth IRA is one the smartest investment vehicles available to the working American. This type of retirement account allows you to grow your investments tax-free. When you make withdrawals after age 59½, you won’t pay any taxes since the money you used to invest in the first place was post-tax income. It’s important to note that the IRS changes annual Roth IRA contribution limits each year. For tax year 2024, the annual Roth IRA contribution limit is $7,000 and $8,000 if you’re over the age of 50. The current annual income limit is $161,000 for singles and those who are a head of household and $240,000 for married couples filing jointly.
- Save at least 15% of your income for retirement: As a general rule of thumb, it’s wise to consistently save at least 15% of your income toward retirement throughout your working career. If possible, contributing more than 15% is even better.
- Eliminate all debt as soon as possible: Debt eats a hole in your finances and decreases available cash flow that could otherwise be invested to grow your wealth. Be sure to pay down all debt as quickly as reasonably possible to allow for more years of investing and compounding before you retire.
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