GOBankingRates works with many financial advertisers to showcase their products and services to our audiences.
These brands compensate us to advertise their products in ads across our site.
This compensation may impact how and where products appear on this site.
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information.
you’ve got the option to read more about oureditorial guidelinesand our products and servicesreview methodology.
Thats why Suze Orman suggests that its time to give them a gentle nudge to start retirement planning ASAP.
They just might need you to help them realize that.
Making one smart choice in their 20s will set them up for success.
Waiting until their 30s (or 40s) to focus means a harder slog.
Heres theone smart choiceOrman is referring to.
All they need to do is nail one key number: 15%, she wrote on her blog.
Their goal in their 20s should be to save 15% of their income in a retirement account.
Orman said that ideally, this will be a Roth account.
That can be through aworkplace retirement plan, or their own Individual Retirement Account (IRA).
In both instances, encourage them to use a Roth, not a traditional account, she wrote.
And its imperative they start now.
My advice is that they just dive in cold, she wrote.
That is, commit to automatically saving 15% of their income ASAP.
The faster this becomes a habit, the easier it is to pull off.
Orman recommends making this contribution automatic to prevent lifestyle creep from getting in the way.
That 15% saving commitment becomes your automated priority that comes before spending.
Of course, you also need to spend on essentials: rent, food, etc., she wrote.
But here, too, I am going to insist that the 15% savings for retirement gets prioritized.
Then you right-size your spending around that, Orman continued.
If that means renting aless expensive place, thats the right trade-off.
If that means eating in a bit more than eating out, thats the right tradeoff.
If that means focusing more on needs vs. wants, thats the right tradeoff.
One way to achieve this is to start saving early and gradually increase your savings rate over time.
Other experts believe that you should ultimately aim to save 30% of your income.
So its important to keep that in mind as you consider which end of the range you are on.
More From GOBankingRates
Share This Article:
