Calling all millennials! If you’re not strategically managing and saving your money, now is the time to start. Charles Schwab Plano has some vital investment advice for millennials during these foundation building years of becoming an adult. Investment advice doesn’t sound glamorous, but it is an important key in accomplishing your future financial goals.
Your best friend is your company sponsored 401(k)
Setting aside money for an unforeseeable future can be really challenging for most millennials. However, Charles Schwab endorses devoting to your 401(k) asap. Committing savings at a young age, as little as 10-15 percent of your yearly earnings can go a long way towards an easy transition into your retirement years. When starting in your early 20’s, you’re most likely to be placed in a lower tax bracket then you would later in life. This means the deduction from tax of a traditional 401(k) could be far less profitable than getting tax-free distributions at retirement. If you don’t have access to an employer plan, set aside enough money to contribute to an Individual Retirement Account each year.
Increase your savings with IRA
Fun fact, you don’t have to choose between an IRA (individual retirement account) and a 401(k). You can contribute both to your 401(k) while also to the max annual (currently $5,500) to your IRA. This investment advice possible strategy is to contribute to your company’s matching your 401(k), then put any additional investments in your IRA.
The future is worth investing
Saving your money is only just one step. Another is to invest your financial savings variously throughout low cost confined ways. Several financial service companies present small fee investment advisory services. This opportunity can help one succeed over time using simple discipline. In investing, more risk means the potential for more reward.
The landscape millennials are facing is vastly different than the previous generation or any other has seen before. Becoming financially educated is critical when it comes to becoming an adult and planning for retirement. More investment routes are available to millennials and now is the time to take advantage of them. Saving money now for retirement is the best choice to ensure a bright future.
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