Millennials' Guide to Retirement Planning

Millennials’ Guide to Retirement Planning: 401Ks and Alternatives Like Harbor City Capital

The question of how millennials should save for retirement doesn’t have a ‘one size fits all’ answer.  There are many opportunities for the younger generation to get their finances in shape, even without having to give up simple pleasures like daily Starbucks lattes or dinner out with friends.

Ultimately, how millennials save for retirement depends on their income, debt, and long-term financial goals.  Even if retirement seems like a far-off concept, the earlier young people start saving, the more money they’ll have when it comes time to kick back and relax.

Here are a few savings options to consider when mapping out your financial future.

Deposit paycheck into savings automatically:

A good rule of thumb to millennials who are new to the job market and who are earning their first paycheck: set a portion of your paycheck to automatically deposit into your savings account.  If part of your check goes straight into savings, rather than your checking account where it’s more readily accessible, you’ll never feel like you had that money to spend in the first place.

Personal finance expert Tanja Hester suggests, “Especially if you get a raise at the start of the year, challenge yourself to live on what you earned last year and save as much of your new money as possible.”

Cash in on your employers retirement plan:

Financial strategist Jake Serfas says, “A 401(k) offered through your employer can be your biggest tool in terms of saving money and preparing for retirement.”

At a time when most millennials no longer have a traditional pension plan, starting and growing a 401(k) through their employer is essential for a secure retirement. Contributions to a 401(k) are deducted from your taxable income, and you can also maximize your savings if your employer offers a matching contribution.  If you’re wondering how much you should be saving? At least enough to get the employer’s match, if there is one.

Stock Market and alternative investments:

As a millennial, with time on their side, investing in the stock market or another alternative investment may be worth considering.

JP Maroney, CEO of Harbor City Capital, says he sees younger investors diving into the stock market as a good thing.  “If you’ve taken time to gain knowledge there are some very good opportunities.”

Harbor City Capital, a global alternative investment firm that specializes in digital marketing arbitrage, digital private equity, and venture capital funding, is committed to helping their clients make more money and build wealth, including their younger clientele.

Investors can take advantage of Harbor City Capital’s proven investment of time, capital, and expertise without the upfront costs of doing it themselves. With over 30 years of experience investing in the stock market, Maroney explains, “The rules are new, it’s totally different, and maybe that’s playing in favor of the millennials who don’t have any past history.”

No matter which savings avenue they choose, saving for retirement as a millennial sometimes means having to work on a small scale to achieve big-picture goals.  Maroney suggests,

“Know yourself, that’s where you start. Know your tolerance level, what you can handle, you have to make smart decisions.”

To answer the question of how much millennials should save for retirement: what matters most is saving early, consistently and often.

Create a budget and monitor spending:

Cash flow is one of the most important things to be aware of, so knowing where your money is going is important.  This means sitting down to create a budget.  To find out exactly how much you’re spending each month, start by determining your overall income.  Then, calculate all of your monthly bills and expenses, and set savings and debt payoff goals.  Record spending and track progress.  Remember to be realistic and try to cut out frivolous spending (the occasional coffee shop latte is ok).

When it comes to setting money aside for retirement, you can never have enough or start too early.  While the basic principles of retirement planning haven’t changed over the past few generations, millennials should still try to invest early, think long-term, and take advantage of tax-advantaged accounts and company matches.

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