What Millennials Need to Know About Retirement

Millennials everywhere are beginning to start saving money for retirement. You may think that retirement is too far away, that you can save starting next year, or start saving when you have a better job. However, millennials are in the best position right now to make sure that their retirement is the most profitable. If you start saving now, the compound interest that you will gain will be incredibly helpful. Here are some things that you as a millennial can keep in mind for retirement.

Max out your employer’s 401(k) match plan

If you currently have a job that offers a 401(k) plan, be sure to check it out. Most employers will match at the very least some of the contributions that you have made. In layman’s terms, this means that if you’ve made some contributions to your retirement plan, your employer will match it. The best thing that you can do is to check with your employer’s HR department to see what, if any, your company may offer. In general, your employer will match up to a certain amount, so you’re going to want to make sure you’re contributing at least that much during the year.

Consider opening a Roth account

When looking at accounts to open, you may know about traditional 401(k)s and IRAs that allow you to contribute money to your retirement fund tax-free. Generally, the money for your 401(k) comes out of your paycheck before taxes, and with the IRA, you can deduct the contributions that you make. Unfortunately, you will have to deduct taxes to pay for the expenses that you rack up when taking the money out.

However, there is a way around this. A Roth IRA works in the opposite direction. When you put money into the account, you pay taxes. Assuming you meet the necessary qualifications, when you withdraw the money, you don’t have to pay taxes. Roth accounts are an ideal account for people who are just starting out in their career, as they’re most likely earning less money now than they may be when it’s time to withdraw the money. Get taxed now, and you don’t have to worry about it later.

Have some non-retirement savings

The thing to remember is that life is going to happen, whether you like it or not. Your car may break down, you may need a procedure, or you may have a family emergency. Unfortunately, these things aren’t free. You’re going to need money to pay for them. The last thing that you want to do is to have to take money that you were setting aside for retirement to pay for those emergencies. Keep your funds safe by setting aside money for emergencies that aren’t in your retirement account.

This blog was originally published on BrooklynnChandlerWilly.com

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ABOUT BROOKLYNN CHANDLER WILLY

Based in San Antonio, Texas, Brooklynn Chandler Willy founded Texas Financial Advisory, where – for the past 13 years – she has been running the boutique Tax, Investment, and Estate Advisory Firm with a focus on catering to the goals and needs of the individuals with whom she works. Within the same year that she opened Texas Financial Advisory, the 2008 Financial Crisis struck and wiped out many small businesses. However, for Brooklynn Chandler Willy, who was still building the firm, the crisis helped her develop a conservative and respectful approach to managing the assets meant to last her clients the rest of their lives. She and her team work with each client closely to define their financial goals and determine the best ways to manage taxes, necessary paths to take, and how to optimize existing assets for their specific needs.

Today, the firm – comprised of seven professionals holding more than 50 years of combined experience – offers a broad range of services with a narrow focus on providing the most comprehensive financial planning and investment solutions. Brooklynn Chandler Willy and the team are also proud to offer insurance products to better help their clients reach their goals.