Asked by Britt  |  Submitted December 09, 2015

What is a good option for a 25 year old college student when it comes to saving for retirement? is it too early?

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  Answers  |  1

December 10, 2015

It is never too early to start saving for retirement. My son had an IRA since before he was out of high school. If we all save a minimum of 10% of our income from the time we started working and invested it in prudently, we would have plenty of resources available for us in retirement.

My recommendation is to start by saving as much as you can up to 10% in a tax deferred account like a 401(k) if you have one available through work or an IRA. If taxes are not an issue for you, I would further recommend at age 25, that you use a Roth 401(k) or Roth IRA. This would allow for more flexibility on the distribution end.

If you are unemployed or do not have regular employment, I make the same recommendation to you that I do for my children, whatever the source of funds, be it birthdays, graduations, or holidays, get into the habit of savings. Put away some portion of those funds whether you think you can afford it or not. Set up a saving account not liked to your regular bank account and put the money there. This starts you on a habit that will make your future financial life easier.

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