How To Plan For Retirement In Your Twenties

If you’re in your 20s generally you’re just starting to get your life off the ground you know maybe you’re starting to think about your future family your future full-time job maybe you’re still in school like i am and retirement is so far away but it is important to start thinking about it and start preparing for it so in this video i’m going to go over five different ways that you can start preparing for your future retirement well in your 20s these are no particular order and i do think these are very important because this is something that not enough 20 year olds or people in their 20s know about and hence they don’t start preparing till retirement until it is very very late so let’s get a jump on it let’s start preparing for your retirement right now with these five ways. the first way is open a Roth ire and Roth ire is a pretty common retirement account when it comes to young people so a Roth ire is a retirement account where you put in after tax money and you are limited to how much you can put in it you can put in six thousand dollars every single year you know you can do that in monthly installments or all at once if you like six thousand actually knew it was fifty five hundred so it has been up to six thousand and once you max it out you can’t put any more in for that year waiting till the next year but a Roth ire generally is for younger people what younger people generally gravitate to and the reason is it is after tax money and that may not sound like a good thing but the other side of that is when you’re 59 and you can start pulling this money out it might be 59 and a half but once you start pulling that money out you can take it out tax-free a lot of retirement accounts generally.

When you take the money out you got to pay taxes on it but because you’re paying the taxes in the beginning you don’t have to later and the reason that a lot of young people then do this is because this is good for people that plan to be making more money later in life so if you’re in a higher tax bracket later in life and you get to pull it out tax-free that’s saving you money because right now you’re not making that much money you’re in a lower tax bracket so you’re being taxed a lot less so that’s generally why a lot of younger people gravitate to it if you plan to be making less later then this may be something you want to look into but if you are young and you maybe have your career ahead of you and you plan on making a lot more money later then this may be something that you might be interested in the second one is an employer 401k so these are very common at any businesses i’m sure you guys have heard of it before but if your company has something like a 401k match this is definitely something that you should take advantage of i highly encourage everyone to take advantage of the 401k match because they’re basically giving you free money and because there’s a lot of young people maybe at the company a lot of people don’t take advantage of it because they’re not thinking about retirement so definitely if you have any type of 401k matching look into it take it seriously and i highly recommend doing that sometimes.

It’s not a one-to-one match maybe it’s 50 cents on the dollar they also have things like profit sharing where you get a share of companies uh profits after a certain point oftentimes and that’s just to kind of incentivize you to keep working hard so that the profits keep going up and up and up but 401ks employer 401ks are definitely something that you should be taking advantage of because oftentimes there are a lot of different benefits that are out there that people aren’t just taking that people aren’t taking advantage and then don’t worry about leaving that job the 401k goes with you you can roll it over into a different account if you like so don’t worry about losing it if you do leave your job that doesn’t happen you know it sticks with you it doesn’t stick with the company but definitely take advantage of it so number two is all about the employer 401k the third way to start preparing for your future retirement is by setting up direct deposits so i really like this one because it forces you to be saving for retirement so oftentimes you know we may be thinking ah yeah i wanna start preparing for retirement I’ll throw a little bit in now and then you don’t think about it for a while maybe a little bit later and it’s very lackluster in that way but if you set up direct deposits you are forcing yourself to be preparing for retirement you don’t even really have to think about it that’s what i like about it you set up how much you want to have and then.

It just goes and it is putting it into maybe some investing account you know or some retirement account or anything like that and it is starting to grow your wealth through that and you’re not even thinking about it you know you want to try to automate and get it kind of out of sight out of mind it does its own thing and you don’t really worry about it so this one is all about setting up direct deposits number four and this isn’t so much a financial thing that you should be doing but more of a mindset thing and this one is all about start looking ahead so as i said a lot of people in their 20s are thinking about you know directly what’s next they’re not thinking 20 30 40 50 years ahead and i encourage you to think that far ahead you know you don’t have to plot out this perfect little plan you know this is going to happen then that’s going to happen that’s going to happen but just have a general idea of you know this is where i kind of think my career is going this is how much money i expect to be making this is how much i want to be spending this is where i want to be you can also start looking ahead and start thinking about different asset classes that you may want to be investing in maybe real estate or something along those lines and just kind of look ahead to see what your finances are going to kind of look like so get a big view of it and start thinking where you want to be not enough people in their 20s do this number five and this one on the list isn’t so much financially related but it is just as important as that financial well-being and that is self-care.

So this video is all about how to prepare yourself for retirement so that you can have a good retirement and then everything else was financial but the physical side of it if you want to enjoy your life at retirement you want to be healthy you know you don’t want to constantly be sick you don’t want to constantly be hurt you want to live life to the fullest after you retire so this one’s all about self-care you know it’s eating right developing good healthy habits you know being aware of nutrition and exercising different things like that and getting in the habit while you’re young and then having these habits follow you throughout your life that way when you retire you are feeling good and you can live your life to the fullest after retirement so this one is all about self-care you know it’s about thinking about the future knowing and just starting healthy habits now because habits in my opinion are the key to success so that will wrap it up those are five different ways that you can start looking at and preparing for retirement while in your 20s and i think it is so so important to start this young and kind of the main reason there is because if you are putting money into an investment account you really are taking advantage of compound interest and it may not seem like that much you know uh what can five ten years ahead of everyone else do but if you actually go and look at a compound interest calculator it’s amazing how much more money you will have down the line just because you started five to ten years earlier you know you could have millions of more dollars just because you started in 2020 while everyone else started in 2030. and it’s also great because you are young you can take a little bit more risks with your retirement.

Be the first to comment

Leave a Reply