From
Your Perspective:
Early bird retirement investing
Start out small
One reason younger adults often shy away from investing is that they’re not usually paid a lot. But investing $50 a week or month is no small potatoes. Since compounding helps your money grow over time, even small contributions can have a big impact when you’re ready to retire. And by opening an account early in your career, and making periodic, if small, deposits, you’re developing good investing habits that will last a lifetime.
To encourage individual investors to prepare for retirement, federal and state tax codes make retirement accounts a good deal.
1. Make a personal
budget, if you haven’t already.
2. Take a look at your budget for places where you can
cut corners, freeing up some cash for retirement investing.
3. Commit
to setting aside a certain amount from each paycheck,
and stick with it. Experts recommend that you save
15% of your pretax salary,
but it’s okay to
start with a lower amount.
One
of the easiest ways to get into the habit of saving
and investing is to arrange for an automatic deposit
from your paycheck into a retirement plan, such as
an IRA.
If retirement contributions are electronically transferred,
you won’t forget to make regular deposits. And
you’ll be less likely to miss the cash, since
it never made it to your paycheck in the first place.
