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Personal Finance

A retirement-planning itinerary for your 20s

By Dianna Doreen
Writer, mPower

  1. Start early, since time is a twenty-something investor's greatest asset.

  2. Contribute at least 10% of your salary to your 401(k), or at least enough to get a full company match.

  3. Remember that 401(k) plans grow tax-deferred until retirement, and lower your current annual tax bill at a time when you probably don't have many other deductions.

  4. Keep in mind that Roth IRAs may provide non-taxable income upon retirement, and may be especially well-suited to a younger investor with a long time horizon.

  5. Consider putting the majority, if not the totality, of your retirement investments in stocks, since your long investment time horizon will help you weather market ups and downs.

  6. Work an emergency fund and spending money into your budget planning so you won't be tempted to tap your retirement assets.

  7. Beware of overspending, and not allocating enough of your income for retirement.

  8. Don't think you're too young to start planning. Consult a professional to help tailor your retirement plan to your individual needs.

For a more detailed look at retirement investing in your 20s,
read our feature article.

The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.
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