Preparing for Retirement

Retirement isn’t something most recent college graduates will immediately plan for upon landing their first job. With all the fuss about whether or not this generation will have access to social security benefits, it’s imperative to start saving as soon as possible to make sure you have a nest egg that will help you live a comfortable lifestyle when you retire.

But obstacles are always there, especially with the rising student loan debt crisis. While this blog in no way should substitute hiring a financial advisor, there are a few best practices you can follow to be better prepared for retirement.

Here’s 5 things Millennials should know about retirement.

1. Start Saving Immediately

If you are a recent college graduate, it’s easy to surmise that you have plenty of time to prepare for retirement. It’s still 40 years away, you have a lot of time to put money back, right? But if you were to ask co-workers in the their 40s or 50s, most would probably tell you they wish they’d started saving sooner.

According to Fidelity, only 47% of 25-34 year-old having started putting money back. Waiting to save will force you to put even more money back down the road. So how much should you put in your retirement? The number varies, but most “experts” recommend putting back ten percent, more if you can afford it.

2. Take advantage of employer contribution

If you were walking down the street and a stranger handed you a $50 bill would you turn it down? Of course you wouldn’t. So why wouldn’t you maximize your employer’s retirement match program?

Most companies offer to match employee contributions to retirement up to a specific percentage of the employee’s salary. This will significantly add up in the next 30 years. Take advantage of any of your employer’s retirement benefits to maximize your retirement.

3. Be Realistic

According to a study by the Insured Retirement Institute and the Center for Generational Kinetics, seventy percent of Millennials expect to spend less than $36,000 per year in retirement, despite that current retirees have more than $46,000 in expenditures a year.

In order to know how much you need to have in retirement savings, you must know how much you expect to spend. Use your monthly budget to determine this cost. For additional help consult a financial advisor.

4. Create an emergency fund

According to Forbes about half of all employees don’t have an emergency fund, making it likely that these employees would withdraw money from their 401k in an emergency situation. Not only are you taking money out of your retirement that when you account for interest it will add up significantly, but you’re also charged a 10% fee.

Protect yourself, and your retirement, by creating an emergency fund. Dave Ramsey recommends having 3-6 months of your salary saved up for emergencies depending on your situation.

5. Diversify your portfolio

You can never predict what the stock market will do on any given day, so avoid putting all of your investments into one stock or sector.


Saving for retirement should start on day one of your first job out of college. The more you save now will impact your financial security in the future. Build your emergency savings, live small and start saving for retirement.

Have any questions? Post them in the comments below.