Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Millennials Investing In Retirement

Summary

Start early, make the most money possible.

Let your money work for you.

Consider opening a Roth IRA to invest for retirement.

As an investor, the best thing you can do is start early. In a market where anything can happen without control, time is something you can control. Taking advantage of time can lower your risk in building wealth which is why advisors say that millennials should begin investing now.

When asking retirees, their biggest regret is not investing sooner. There are many strategies for investing that millennials can take advantage of. One thing a millennial can take advantage of is compound interest. Saving a large sum of money is a great way to make money because you’re letting your money work for you, not the other way around. Compound interest is the way your assets grow in the form of investment returns. It starts when the principal amount that you invest grows when the market performs the way you hope. Your returns compound in future years because your principal and your past returns all increase in future positive markets. If someone were to save $10,000/year with an average annual return of 7% from now until you’re 65 years old, you can accumulate upwards of $2 million. The more time you have, the more money you can make, so don’t waste precious time.

A big thing that can contribute to making more money is the money that comes straight out of your paycheck. There are several employers that have set up a workplace retirement plan. It is suggested to set aside 10% of your paycheck to be automatically taken out. It might be hard not living without that money, but you are rewarding yourself for the future. If you were to get a raise, you should increase the amount you’re saving by roughly 2%. The thing to think about is that you’re working now for your future later when you won’t be able to work.

Millennials should consider investing in a Roth IRA. This is a great investment opportunity because Roth IRAs are funded with after-tax dollars therefore, the contributions are not tax deductible. There are some income limits and you won’t be able to withdraw your invested money until you are 59 ½ years old. If you withdraw beforehand, you will be penalized unless it is for a qualifying reason. It is important to know where your money is going and it is very rewarding to see your results at the end.

If you are ever unsure of what kind of investing you want to get into, there are many professionals that are more than glad to help. With help you are avoiding costly mistakes. One benefit of working with a trained financial professional is having an accountability partner involved in your decision-making, which can help you to avoid costly mistakes.

One should set up a goal whether it is a 3 year goal or a 10 year. Track your progress often and when you reach those goals, reward yourself and then raise that goal. There is always room for improvement.