Retirement Saving Tips for Millennials

Categories: Smart Money Decisions
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Published on: April 10, 2017

 

With today’s more competitive job market and fresh graduates burdened with student loan debt, it’s obvious why most millennials are less aggressive when it comes to saving for their retirement. If you are part of the generation Y who’s ready to explore the world of investing, here are some important points to keep in mind when planning to start saving for a retirement fund.

  1. Find a Reliable Advisor

If you have zero experience and limited knowledge about bonds, stocks and mutual funds, you’ll probably feel overwhelmed by the volume of investment options out there. Finding someone who can give you sensible and unbiased advice on what moves to make is critical to your financial health.

While it’s tempting to run to your parents for financial advice, it’s a better idea to talk to an expert who specializes in your demographic. After all, financial strategies suitable for a 25-year-old is likely very different from a 45-year-old.

  1. Start Investing Early

If you find it difficult to save a portion of your monthly pay check, you need to find an investment tool to make saving less effortful for you right away. Check if your employer offers a CPF (Central Provident Fund) or an SRS (Supplementary Retirement Scheme) and learn how to use it well.

These programs will help you save by providing tax benefits and automatically deducting your monthly payment from your pay check, so you’ll never get a chance to spend it. If you’re self-employed or if your employer doesn’t offer such programs, set up a direct deposit to an independent retirement account to make saving easier.

  1. Budget Your Lifestyle

If you’re young, this might be the hardest thing to do. Millennials tend to enjoy life too much—we often buy expensive things recklessly, travel on whims and have frequent night-outs. All of these habits cost you more money that you could have saved for your retirement.

Realistically, we don’t want to deprive ourselves of having fun in order to save, so plan for practical ways to save. Things like minimizing use of air conditioning system or turning off appliances when not in use will help reduce electricity bill. Pay your bills on time, so you won’t incur penalty charges and deactivate unnecessary premium subscriptions.

Investing and planning for retirement can seem like a hassle, but for millenials who have witnessed firsthand how unpredictable the economy can be, it’s particularly scary. If you are not ready to take the risk, taking baby steps and starting educating yourself as early as now goes a long way to ensuring your future.

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