The last thing you think about upon leaving college is your retirement. Instead, you worry about getting a job in order to pay off those student loans that have piled up. However, it is just as important to think about your retirement. Your older self will thank you down the road. David Giertz, a long time financial adviser, offers some sound advice for those under 40 years of age.
Max out your retirement options and not your credit cards
Congratulations, you landed your first job. Part of your benefits package may include the opportunity to make contributions to a retirement plan. David Giertz strongly recommends that you take full advantage of this option and make the largest contribution allowed. The fact that the money is taken directly from your pay, you will never miss it.
Do not live above your means
Raises and job advancements are worth celebrating, but that does not mean you go out and buy that red sports car. Cars are not the best investment because they lose value over time. Giertz’s rule of thumb is before purchasing a large ticket item, make sure you have available six months worth of payments. Life is unpredictable, and you need to make sure you have a safety plan in place for these type of purchases.
The idea of a safety net does not apply just to cars and homes, but it applies to life in general. The lump sum of emergency money should be equal to six months of living expenses. David Giertz suggests cutting all unnecessary spending until that total is reached.
Find a trustworthy financial advisor
It is not always advisable that you take on the responsibility of managing your own investment portfolio. Mistakes could cost you money in the long run. This may take a bit of homework to find the person that you trust and that understands your goals, but it’s your money, and you need to spend it wisely.