How to Start Saving for Retirement When You Just Start Your Career
Now that you’ve spent a good amount of time, energy, and money getting your online master of financial economics degree it’s time to start thinking about your future. The first goal out of school will likely to be to land a job in your field of study, perhaps even start your very own company, but what about thinking further into the future.
As a financial economics major you understand better than anyone how important it is to save for your retirement, but there’s also reality. Is it possible to start saving for your retirement right out of school, especially if you were planning to start your own business? The answer is yes, it is possible, and it’s actually a wise choice to make. Here’s a look at some tips you can start to use as you start your career, possibly your own business, and start to carve out your future.
Choosing Your Priorities
One of the most common questions graduates are faced with is whether it’s better to start saving for their retirement or pay off their student debt/loans first. Nobody likes being in debt, but on the other hand isn’t it ideal to save for as long as possible for your retirement?
Here’s the thing, many experts believe that rushing to pay off your student loan right out of school actually hurts you in the end. Sure, the debt will go down, but you’re really not getting anything out of it. If you look into retirement contributions there are usually perks such as the interest it will earn, some companies actually match your contribution, and there tends to be tax breaks.
This doesn’t mean you shouldn’t pay off your student loans, it just means you don’t have to rush to clear up that debt, instead focus on the minimum payments and put your extra money into retirement contributions. In the end, you get more bang for your buck.
Make Use of Automatic Withdrawals
Another tip is to set up an automatic withdrawal through your bank. Choose a set amount of money that will come out of your account weekly, bi-weekly, monthly, whatever you feel comfortable with. By doing this you won’t forget to put aside savings on a regular basis. This money should be deposited right into a retirement savings account where you can’t access it.
Keep Things Simple
Instead of getting too overwhelmed with the various bonds and stocks to invest in, just keep things simple. Stick to a retirement savings account that you understand and that is stable. As you begin to make more in your career you can re-examine your financial and investment portfolio.
It’s Never Too Early
As the popular saying goes, it really is never too early to start thinking about your retirement. It’s easy to get wrapped up in the completion of your online master of financial economics program and starting your career, but it’s still important to think of your retirement years and how to make them as comfortable and enjoyable as possible.
