Chicago — If you’re wondering when the right time is to get started with a retirement savings plan, experts say the answer is now.
Here are three tips you should keep in mind as you strategize for your retirement, according to CNBC.
Start within your means
As many Americans live paycheck to paycheck amid a challenging economy, it may feel more difficult to start saving. However, young adults can still make a retirement savings plan tailored to their lifestyles, according to Douglas Boneparth, a certified financial planner and the president of Bone Fide Wealth in New York. Starting with a small amount can make a huge difference over time due to compound interest.
Try adhering to the 50/30/20 budgeting strategy, Lazetta Braxton, a CFP and the co-CEO at virtual planning firm 2050 Wealth Partners advises. That means you spend no more than half of your income on essential expenses and allocate 30% for discretionary expenses and 20% for saving and investing.
Leverage free money
If your company offers a 401(k) plan or another type of retirement plan, try to contribute enough to that plan to receive the full employer match. Braxton recommends contributing to the amount your employer will match, at the least.
Turn to a financial advisor for help
A financial advisor, who holds the CFP designation or is required to act as a fiduciary, can help you prioritize your goals and develop a plan to achieve them.
“You want someone who’s going to walk with you, help educate you, and help you with life decisions,” Braxton said. “Because you’re just starting your investment journey in your 20s and it’s so key to have someone you can trust.