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Learn how to do a budget, take advantage of your employer’s 401 k, find a good 401 k calculator, and Feedthepig to pay off debts—these steps will help you build savings for retirement at age 25 according to an article in USA Today.
For each, she outlines five steps all Americans should take if they wish to stay on target in their savings for retirement.
Step-by-step instructions are available at SmartAboutMoney.org. The home budget calculator at MindYourFinances.com will also show you how to do a budget.
If your budget leaves you short of money to cover expenses and savings for retirement, you have two options:
Canavan points out that it's easier to work extra hours before you’re swamped with family obligations.
If you do have cash leftover each month, start your savings for retirement program. Having a savings goal is crucial, for people who set a goal are more likely to reach that goal, according to Ken McDonnell, program director for the American Savings Education Council. Try to 15% of your income annually.
That program really works in your favor if your employer offers to match contributions. Failure to contribute enough to get that match is like passing up free money. To see how increasing your current contributions now will boost your savings for retirement, try the 401 k Calculator at AARP.org.
If you're paying interest on college loans and on your credit card balance, pay off those debts first. To see how long it will take, try the Feedthepig credit card pay-off calculator at Feedthepig.org.
WWhen you’re young, you have time to recover from downward cycles in the Market because you won’t need those losses for forty years or more. You will have recovered them by then. The Stock Market is for the long-haul in building savings for retirement.
Living awhile rent-free will allow you to pile up cash in your savings for retirement accounts and other major life events on your horizon, such as purchasing a home, planning a wedding, and raising a family. Moving in with Mom and Dad is not that unusual. Thirteen percent of families with grown children said an adult son or daughter moved home last year in a Pew Research Center survey.
Topic: Retirement Planning
Subtopics: Introduction • Retirement Planning • Mistakes • Lessons • Savings for Retirement • 15 Tasks • Tips from the Chicago Herald Tribune • Americans in Their 60s • Charles Schwab Timeline • Do This at Age 25 • Do This at 45 • Do This at 65 • AARP Retirement Calculator • Retirement Planning Quiz • The Answers • The Benny Award