For many younger investors, the thought of saving for retirement is the furthest thing from their minds. After all, there’s student debt to pay, rent to meet, and food to put on the table. It’s not uncommon for younger investors to put off saving for their future for years until they’re already well-established in their careers. Though common, it’s far from the best idea. In fact, the younger you start building your financial planning strategy, the better off you’ll be when you start approaching retirement age. Here are a few simple tips to help get you started, no matter how far along you are in your career.

Take Advantage of Employer-Offered Retirement Plans

Many employers offer retirement plans, both matched and unmatched, to help you start saving for your future. Typically, the service fees on these accounts are minimal and you’re allowed to contribute as much or as little as you want each month. To further simplify your finances, the amount you choose to contribute is automatically deducted from your paycheck, so you won’t have to worry about remembering to make a monthly contribution. If your employer matches your contributions, your savings will grow even faster, making it worthwhile investment.

Don’t Be Afraid to Take Risks

Low risk investments may be the safe way to go, but they offer very small return on your money. When you’re younger, you have more years between making the investment and when you retire, giving you more risk tolerance than your older coworkers. The higher the risk, the higher the potential for return on your investment. Though you will want to balance your portfolio with both high and low risk investments, it’s important to avoid playing things too safe. Take a few risks, consult with your financial advisor, and invest in the options that you believe in most. Even if you lose a little bit of money every once in a while, you’ll still see an increased return over time.

Diversify

The key to a great wealth management strategy is diversification. Rather than investing in a single stock or bond, make sure you diversify your portfolio. The more types of investments or different index funds you work with, the better. This will hedge against unexpected loss and keep the negative events in a single industry from damaging your portfolio beyond repair. Diversification helps balance your risk and makes your portfolio better established for the future. As the saying goes, “don’t put all of your eggs in one basket!”

Avoid Taking Early Withdrawals from Retirement Accounts

Your retirement funds grow more quickly when you leave money in them. Taking early distributions from your retirement account not only decreases your overall rate of return—it also can cost you hundreds of dollars in fees. When you withdraw money from a 401(k) before the age of 55, you’ll have to pay an early withdrawal tax on the amount you take out. Depending on how much you’re withdrawing, that number could be well over $1000. If you’re worried about having enough money to cover emergency expenses, speak with your wealth management advisor to discuss how best to create a safety net of savings.

Incorporate Investments Into Your Budget

Often, you need to spend money to make money and if you don’t budget for your investments properly, allocating those funds to grow your portfolio can be difficult. Look at your current finances and see how much money you can reasonably set aside both for savings and for your investments. Remember, when you’re first starting out, every little bit helps. If you can only set aside 20 dollars a month, start with that. You may not be able to buy much in the way of stocks, but if you keep saving 20 dollars month after month, you’ll be able to start investing by the end of the year. As your income increases, start saving more and investing more. This will set you up for success over the long-run.

Use Your Tax Refund Wisely

After doing your taxes, receiving that refund check can be exciting. You can use the money to go on vacation, buy that new TV, or treat yourself to a nice dinner. Though those things may seem appealing, they’re not the best investment in your future. Rather than spending your tax refund on material goods immediately, invest it. Contribute to your 401(k) or IRA. Use it to purchase stocks you’ve had your eye on for most of the year. Either way, you’ll be using money to benefit your future rather than adding more physical possessions to your home.

Seek Advice and Seek It Often

Understanding market trends and portfolio performance can be difficult, especially if you’re just starting out investing in your future. Rather than trying to puzzle it out on your own, ask for help. Work with a wealth management professional to help you understand how your portfolio is growing, which areas need improvement, and what can be changed to help you meet your goals more quickly. The more involved you are in your retirement planning, the better off you’ll be.

Don’t Get Stagnant

Smart investing takes work and consistent review to make sure your portfolio is growing in the way you want. Though you may see success with a single strategy for several years in a row, you’ll still want to actively monitor your performance and make adjustments as needed. Making even minor adjustments to reflect the changes in the economy and your chosen industries will help you reduce the likelihood of an underperforming portfolio. Keep in mind that frequent review is always a good idea, it doesn’t have to be done each week. Instead, check in on your performance every month to three months. This will be enough to ensure that you’re keeping up with the changing market and give you the opportunity to adjust before losing a significant amount of your investment.

If you’ve been saving for a few years and are ready to take the next step in retirement planning, contact us today. Our experienced team may be able to help you develop a strategy to help you reach your financial goals both today and in the future.