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Money Things

When should you start planning for retirement?

Money Things

When should you start planning for retirement?

It’s never too early to think about the future.

For young people, retirement seems light-years away and it may look like there’s enough time to adequately save. The reality is that it’s never too early to start financial planning for the future. In fact, most experts say to begin saving as soon as you graduate from college. While there is social security, it is generally advised that folks shouldn’t rely solely on that. By 2034, social security will only have enough funds to payout 78% of the benefits it provides. The COVID-19 pandemic also had huge impacts on when many will retire, making some delay it by a few years. So, it’s definitely important to be aware of other ways to ensure a comfortable life once you leave the workforce.

So how can you protect yourself in your twilight years? There are a few ways to do it. Let’s dive into the importance of saving for retirement and the different ways you can save for the future.

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  1. What are some retirement options?
  2. 401K
  3. IRA
  4. Personal savings
  5. Investing

What are some retirement options?

Picture a fresh-faced recent college graduate just heading out into the world. They may have a very tuned-out plan for their career, may still want more education, or may want to start gaining experience through an internship. The sky’s the limit!

While being an ingénue and having the world as your oyster is cool, the reality is life can come at you fast. Now, we’re not suggesting to not have an idealistic view of the world if that’s your nature (and it should be at that stage in your life), but it’s also best to have an understanding of what retirement accounts are and how they will benefit you in the future.

Generally speaking, there are four different ways people can save for retirement—401K, IRA, personal savings, and investing. Let’s look at each of these.


A 401K is a feature that allows employees to contribute a portion of their wages to individual accounts. When you’re eligible, you’ll have to decide how much to contribute to the account on a yearly basis. Usually, your HR and payroll department will deduct the amount, pre-tax, from your paycheck. This can seem like a simple decision, but it’s important to make sure that you can still pay your bills, debt, and save money while you’re making this contribution.

Some employers also do a 401K match, where they match a total amount of your contribution or a percentage of it. This is also a great way to add even more money to your account. It’s best to talk to your People team to determine what options would work best for you.


IRA stands for Individual Retirement Arrangements. Traditional IRAs allow you to make tax-deferred investments that can provide financial security when you retire. There are many different types of IRAs and resources on the IRS website to help you figure out which ones may best suit your needs. For additional guidance, you can set one up with a bank or other financial institution, life insurance company, mutual fund, or stockbroker.

Personal savings

Trust us, we know it’s not easy to save when there’s so much retail temptation out there. But if you tighten the purse strings, so to speak, it really does make a difference in having some funds for a rainy day.

The easiest way to think about personal savings is by dividing your paycheck using the 50/30/20 budget. 50% is for fixed expenses, 30% is spending money on non-essentials, and 20% is allocated to savings and debt payoff. It’s also helpful to spend less than 30% of your income on housing, if possible,  and aim to save between three and six months of expenses for emergencies.

While savings accounts don’t typically earn as much Return On Investment (ROI) like traditional investments do, it’s still a good option that puts a chunk of money aside for the future.


Investing goes beyond just purchasing stock; it’s a way to set aside money while you are busy with life and have that money work for you so that you can fully reap the rewards of your labor in the future. Investing comes with the risk of losses, but the hope with investing is that it will grow over time. Investing in the stock market is a great way to start this journey.

While some studies have noted that most people begin investing in their 30s, it’s actually a smart move to do it even as early as your teens. Not only will interest compound but it’s a way to have a financial outlet where, usually, the person who invested the funds never has to maneuver the account.

Also, having a life insurance policy is a great investment. While traditional stocks make you gain wealth while you’re alive, having insurance protects your loved ones if the worst was to happen. If you have guarantors on private student loans, share an apartment with roommates, or you want to make sure Mrs. Wigglebottom the cat has an endless supply of catnip, life insurance can ensure all of this is under its wing.

The opinions we expressed in this post are for general informational purposes only and are not intended to provide specific advice or recommendations.