Many millennials who carry a large debt load could be making a mistake as they face the challenge of planning for retirement.
Mounting student loan and credit card debt has become a burden to the millennial generation as they begin their professional careers. And, while debt should be paid off as soon as possible, many of the millennial generation are making the mistake of delaying retirement planning until they are at risk of not having enough savings for their retirement years.
Recently, U.S. News & World Report offered some debt reduction and savings advice for millennials in “How to Balance Debt Reduction and Retirement Savings.”
The tips include:
- Avoid High Interest Debt – Getting out from high interest debts, such as credit cards, as quickly as possible allows people to save more for retirement.
- 401(K) Matching – If your employer offers a 401(K) matching program, no matter how small, take advantage of it.
- Buy Cars With Cash – Saving money to buy a car for cash instead of financing the car purchase is a good way to have extra money for retirement.
- Be Realistic – It is important to set realistic goals about how much money you will need for retirement.
- Be Aggressive – The younger you are, the more aggressive you should be with investments.
Once millennials do start saving for retirement appropriately, they will also need to get estate plans that detail how those savings should be distributed should something happen to the savers.
Speaking with an estate planning attorney could help you meet the challenge of saving for the future and paying off debts.