Asked by Brittany  |  Submitted August 08, 2016

I am a 26 year old married woman with 2 children, is it too early to start thinking about retirement? What can I do to start preparing?

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  Answers  |  2

August 09, 2016

Hi Brittany! I don't think it is EVER to early to start thinking about retirement. You have time on your side, and time equals money! (Check out The Rule of 72 and learn the principle of compound interest!). The simplest explanation for you to start preparing is to pay yourself first. Before bills. Otherwise, life gets in the way, and the next thing you know, you blink and you're in your 40's with not much of a retirement.

If you can automate your retirement savings, that's even better. Out of sight = out of mind. Put it on autopilot, so to speak. If your employer offers a matching 401(k) plan, take advantage of it and contribute the max of what they'll match. That's free money. It's like if you give me $1 and I give you back $2. I'd take that deal every day of the week and twice on Sunday!

If you'd like to speak about your individual situation, I'd be happy to help...

Mike Zaino

$commenter.renderDisplayableName() | 10.25.20 @ 08:01


August 16, 2016

Of course, the answer is a loud "No". It's not too early, in fact, my 17 yr old has been saving from her babysitting money since she was 12 and should graduate college with over $50K in her Roth IRA.

To prepare - as Michael said, be sure you are making the most of any potentially matched 401(k) deposits. Never walk away from that free money. The next step I'll suggest is to review your spending and write out your budget. It's a bit of a process as you need to look backwards to see where all your income has gone, and then forward, how to take a chunk (10%?) and send it off to retirement savings.

Your current position is important - (a) you have a sizable credit card bill at 18%+. In this case, you still go after the matched 401(k) deposits, but the most important second goal is getting rid of that debt, and understanding why it came to be. (b) no card debt, but no real savings. This is strictly a budget issue. If you made 10% less, you'd still survive, you just need to change some priorities, Use your budget to set those priorities, and start saving. (c) you actually save, but don't call it "retirement". This is great. Set aside an "emergency fund", about 6 months worth of expenses, and then kickstart your retirement savings!

$commenter.renderDisplayableName() | 10.25.20 @ 08:01