In your 20s? Here's how to start retirement saving now

[00:00] there's a lot of differ advice out there

[00:01] when it comes to saving up for

[00:03] retirement and for young people it can

[00:05] get really confusing really fast in some

[00:07] cases according to a Fidelity study on

[00:09] average Americans have saved only 78% of

[00:12] the amount that they'll need in

[00:14] retirement so how do you get started

[00:16] let's go to square one here joining me

[00:18] now is Tiffany alishe who is the is's

[00:21] known as the budget n as well we should

[00:22] also mention she's a personal finance

[00:25] education educator and author you see

[00:27] the book there on the screen new book

[00:29] made the Practical guide to reaching

[00:32] your financial goals Tiffany great to

[00:33] have you here in studio with us be here

[00:35] Brad our friend Ross Mack actually

[00:36] that's my friend too just so you our

[00:38] Collective friend Ross Mack advises

[00:40] against maxing out your 401K and you

[00:43] seem to agree to some extent here so

[00:44] what are the levers that people can pull

[00:47] prior to maxing out that 401k before

[00:50] thinking about maxing out your 401K

[00:51] because it might not be realistic

[00:54] $23,000 is the the max for 2024 okay so

[00:57] a lot of people don't have that the

[00:58] average American is making less than

[01:00] $60,000 a year right so you want to ask

[01:03] yourself one do you have proper health

[01:05] insurance maybe you want to save for a

[01:07] down payment on a home maybe you have

[01:09] high credit card debt that you want to

[01:11] focus on do you have life insurance if

[01:13] you have a family there are other things

[01:14] plus the 401K is not the end all Beall

[01:17] when it comes to retirement accounts

[01:18] with tax advantages there's also a WTH

[01:20] Ira have you considered that so consider

[01:23] those things before Max maxing out but

[01:25] what you want to do Brad for sure is

[01:26] whatever whatever your company matches

[01:29] make sure you at least get that match

[01:30] that's the free money that's owed to you

[01:32] okay get that match and that's the

[01:34] second time that we've heard that in

[01:35] today's show you know when you think

[01:36] about beginning retirement planning for

[01:39] some who are just entering into the

[01:41] full-time Workforce in their 20s that

[01:44] conversation starts then so how can

[01:46] people that are even in their 20s start

[01:48] to begin their retirement plan

[01:49] especially in your 20s because time is

[01:51] on your side isn't that how the song

[01:53] goes right so one you want to start now

[01:56] it doesn't matter how small the amount

[01:59] start now and when you're 20s I want you

[02:01] to create the Habit that the more you

[02:03] make the more you start to set aside so

[02:05] every time you get a raise and increase

[02:07] to your income you're going to set aside

[02:09] more in your 20s it's also a good time

[02:11] to practice asking for advice if you

[02:13] have a traditional 401K at your at your

[02:15] job they almost always come with a

[02:17] financial advisor attached call them

[02:19] reach out to them and leave your money

[02:21] alone don't touch it because if you

[02:23] allow it compound interest is really

[02:25] going to set you up for retirement

[02:26] what's the one thing that you wish you

[02:28] could tell your 20-year-old self about

[02:30] retirement if you could go back and do

[02:31] things differently well honestly I would

[02:33] have told her that like one when I first

[02:35] started I didn't realize I actually had

[02:37] to choose my account that I had my money

[02:39] sitting in a money market account for

[02:40] longer than I knew because you know the

[02:43] money you say yes take out this much

[02:44] money a month for my check I didn't know

[02:46] like past that girl you have to make a

[02:49] decision where it's going to go so it

[02:50] was there for a couple of years before I

[02:52] actually chose my accounts and I lost

[02:54] out on that earnings so that's what I

[02:55] would tell her like to not just start

[02:57] now educate yourself see it through ask

[02:59] ask questions we me we we mentioned from

[03:02] the study from Fidelity how many people

[03:04] do not have enough set aside for

[03:06] retirement what can people do if they

[03:08] don't have enough or make enough to set

[03:10] aside for retirement right now and

[03:12] honestly that's going to be so many

[03:13] people so one whatever you can set aside

[03:16] set it aside you're also going to want

[03:18] to really look about increasing your

[03:19] income can you we hate to hear the word

[03:21] side Hustle but what other things can

[03:23] you do to make more money can you budget

[03:25] a little better maybe there's some

[03:27] expenses you can get rid of so you can

[03:28] put more money toward retirement also

[03:31] consider that retirement might look like

[03:32] working for you you might have to work

[03:34] part-time to supplement your retirement

[03:36] income and also don't give up like it

[03:39] can feel really overwhelming but

[03:40] retirement can be still a pleasurable

[03:43] experience if you start to do something

[03:45] now okay and just once you finally set

[03:48] that that up for yourself and you say

[03:50] hey I'm ready to retire what are the

[03:52] pitfalls that you need to avoid once

[03:53] you've retired so that you can

[03:56] responsibly tap into the budget that

[03:57] you've created for yourself so once You'

[03:59] retired I want you to make sure that

[04:00] you're really looking at your healthare

[04:02] expenses it's one of the main expenses

[04:03] that are going to go up once you're

[04:05] retired and so like now might not be the

[04:07] time I get it that we all want to throw

[04:09] money away at our private island but you

[04:10] might want to make sure that you have

[04:12] enough Healthcare expenses to cover

[04:14] whatever that's going to look like also

[04:15] too like mapping out what life looks

[04:18] like we're living longer and longer and

[04:19] longer how much do you actually need can

[04:21] you reduce some expenses now is a great

[04:23] time to say do we need this big old

[04:24] house maybe there's something smaller

[04:26] maybe we can sell this house and put

[04:28] that money toward retirement as well and

[04:30] enjoy you know you work so hard enjoy

[04:33] enjoy enjoy