When you’re young, retirement can seem a long way off. Those startling headlines about the retirement crises and savings shortages can seem irrelevant. But evidence suggests that many of today’s retirees are woefully under-prepared, so it’s even more critical than ever for people in their 20s to start planning for retirement now.
According to a study*, the average working American household has only $2,500 in retirement savings — those households closer to retirement age only have about $14,500 saved. Either way you look at it, that’s not nearly enough to support yourself. That’s bad news for those nearing retirement, but if your retirement is a long way off, use time to your advantage and start saving early.
If you can invest through an employer sponsored retirement plan, (typically a 401(k), 403(b) or 457) do so. Your company may even offer a match. If your company doesn’t offer a plan, consider opening an IRA or a Roth IRA.
It’s tempting to put off saving until you pay off those student loans or get that raise you’ve been anticipating, but any amount, no matter how small, is important to your financial future.
*Referenced study can be found here: http://www.nirsonline.org/index.php?option=content&task=view&id=883 By clicking this link, you'll leave this site and go to a third-party website. Ariel does not control the content or privacy practices of the other website and does not endorse or accept responsibility for the content, policies, activities, products or services offered on the site.
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