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Chances are, youre still finishing up college or have recently graduated if you went down that route.
Retirement probably feels far away, and why shouldnt it when the average person doesnt retire until their 60s?
But just because thats the average age doesnt mean you want to wait that long.
Maybe you want to retire early.
Or maybe you just want to set yourself and your family up for long-term prosperity.
Whatever the case, youve got as much time on your side now as youll ever have.
Theres no one-size-fits-all answer to how much you should be saving for retirement in your 20s.
Your retirement plan will be based on your goals, needs and financial situation.
Itll probably change as you get older and live your life, too.
This decade is a golden opportunity to leverage the power of compounding.
This is called the 1x rule.
This rule wont work for everyone, of course.
After all, each individual has their financial obligations, retirement goals and the like.
It can, however, serve as a guideline.
Take Advantage of Retirement Plans
If saving that much money seems impossible, try not to fret.
There are ways to make it happen, one of which is to use tax-advantaged retirement plans.
If a 401(k) isnt available, open an IRA, said Godur.
Some retirement planshave annual contribution limits.
For example, the current limit for IRA contributions is $7,000.
The annual limit for 401(k)s is currently $23,000.
The interest charges can seriously set you back when it comes to retirement savings.
Still, if youre going to take risks, your 20s are the time to do so.
Time is on your side to recover any losses may incur in the short-term.
Before you invest, verify you have some money set aside for emergencies.
That way, it’s possible for you to invest and save more aggressively withless financial stress.
Racking up high interest rate consumer debt can have severe negative consequences when trying to plan for retirement.
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