You’re done with college, you’ve landed a career, and start earning. Once you do so, it’s never too early to start saving and imagine an enjoyable and assured retirement. Realizing this is easier when you plan your finances.

So, the first thing you should know is: how much you should save. The answer? Something! Anything! It’s not easy to put a big chunk of your paycheck away when it isn’t all that much to begin with. However, there are practical guidelines out there that suggest saving either a percentage of your check, or setting a fixed sum of what you can afford per month. Regardless of the amount, make sure that saving is your priority every time your paycheck comes. It is also important to take into consideration that your savings goal must adjust and balance to the kind of lifestyle you want to live in retirement.

Now that you know how much to save, you should start thinking about WHERE you are going to save it. If your employer offers a 401(k) or a retirement plan that THEY contribute to, take advantage of it. If you can, maximize the amount YOU contribute – at least to the point of your employer’s maximum contribution.

If your employer doesn’t offer much in the way of a retirement plan, then consider opening an IRA or a ROTH IRA at your local bank. For many investors, it is advisable to focus your savings in an IRA (versus a ROTH IRA) because the money that you contribute is tax deductible and grows on a tax-deferred basis. This means that you get to write off from your taxes any contributions you make. It allows you to delay paying taxes until you withdraw the money in retirement. This is a strategic approach because you might be in a higher tax bracket now than you will be when you retire. *

There are many cases for investing in different types of retirement accounts, but on a basic level, 401(k)’s and IRA’s are an appropriate place to start.

Everyone’s case is different so it’s difficult to recommend specific investments within these retirement accounts, but on a general level, the younger you are, the more risky you can afford to be. The closer you get to retirement, the more you’ll likely to dial down the amount of risk in your portfolio. It’s worth seeking out advice from a licensed financial advisor when you set your account up so that you’ll get professional advice about what kind of investments you should make.

It is way too important to save for retirement; it will afford you the kind of life you want after all those years of hard work; you’ll thank yourself later. Just think about it like this: right now you are paid to work. When you retire, your savings will allow you to pay yourself to do what you love.


Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 may result in a 10% IRS penalty tax in addition to current income tax. The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified.

Limitations and restrictions may apply. Withdrawals prior to age 59 or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.