Hi everyone, welcome back to Fiscal Friday. This is Bess Byers with A Generation Empowered. We’re power walking Palm Springs to make sure Millennials are ready for retirement. Sure it’s decades away, but can we start planning now? What are some retirement options for Millennials?
Before you even consider retirement, it’s important to take these two steps. First, establish an emergency fund of $1000. Next, pay off all your credit cards. Now you’re ready to think retirement…
Millennials have several options when it comes to retirement planning.
A 401(k) is a plan that allows employees to store a fixed percentage of their paychecks in a retirement account. The employer also contributes to the employee’s savings, as an incentive. With a 401(k), the income is not taxable until you withdraw it at age 65.
A Roth IRA is an individual retirement account that, if done correctly, can provide tax-free income in retirement. If you expect your tax rate to be higher during retirement than your current rate, Roth IRAs are for you. They’re ideal for Millennials and low-income workers!
Another building block of successful retirement is stocks. While these can be a great way to build wealth, they’re also unpredictable. It’s recommended to have a portfolio of investments and work with a trusted broker.
Finance guru Dave Ramsey suggests investing 15% of your gross income to allow for a sizable retirement fund while still maintaining quality of life today. Additionally, stick to your plan, no matter how markets are doing.
And now we have Ginny Robinson, retired for 25 years, with her advice to Millennials. "You can save each month, once you establish that habit," she says. "You will be surprised at how fast your savings grow."
Want to be a millionaire by the time you retire? Starting at 25, if you invest $500 a month, your investment will grow to approximately one million dollars by the time you're 65.
Millennials, we better start planning now if we want to enjoy those gin and tonics by the pool. This is Bess Byers, signing off, and remember, it’s your generation and you’re empowered!