Many finance experts recommend saving up to 12 times your annual pre-retirement income. They also suggest setting up automatic transfers to your savings accounts.

But Millennials have their unique challenges. They may struggle to save enough for retirement because of job hopping or mountains of student debt. They’re also rewriting the script for what retirement might look like.

Get a Financial Plan

As a starting point, millennials should focus on their financial state rather than an arbitrary retirement date. They should plan to save enough to work optionally or even stop altogether if they want to.

One way to do this is by establishing a budget with a saving component. This could include decreasing savings contributions for a year or two to pay off debt with the plan of boosting them back up later.

Millennials should also consider their employer’s retirement plan options. Employees can contribute up to 15% of their income to a retirement account and receive a matching contribution from their company. That could help them build an impressive nest egg. It’s essential to start early, and a financial planner can help.

Set a Timeline

It’s essential to have a timeline for retirement planning Wyckoff NJ. This can help you see how much closer you are to your goal and also help you avoid making mistakes that can cost you money in the long run.

While many millennials roll their eyes at negative stereotypes of their generation—a party-loving, job-hopping group frivolous with their money—they’re doing what it takes to prepare for their futures. Many are turning to financial planners, especially those who offer a digitally savvy approach to planning for their clients.

Create a Savings Goal

Retirement may feel far off for many millennials, but it’s essential to start saving as soon as possible. 

Creating and sticking to a financial plan is suitable for all generations. Still, it’s crucial for millennials, who may have fewer resources to fall back on as they enter retirement. Starting early gives them the best chance of a secure future.

Start Investing

Most millennials agree that saving is essential for retirement, but many must do more. One big reason is that their employers don’t offer a retirement plan, or they’re in a part-time status that makes them ineligible for their company’s plan.

It’s also essential to start investing as soon as possible because the more time your money has to grow, the better. For example, if you aren’t already contributing to an individual retirement account (IRA), you should consider doing so now, as it allows you to defer tax on your savings.

An excellent way to do this is to start small—losing track of how much you save and spend each month is easy. And remember, it’s best to focus on your target financial state, not an arbitrary retirement age.

Build an Emergency Fund

Whether for a car payment or a health issue, most millennials cannot put away enough money to cover the unexpected. This often leads to less-than-ideal funding options like going into debt or pulling from their retirement account, which can result in steep penalties and taxes.

Instead, millennials can take small steps to build their emergency savings. For example, they can set aside some of it if they get a large tax refund or a cash gift from a holiday or birthday.

It is advisable to have a contingency fund that can cover expenses for three months. If they do this consistently, it can add up quickly. The best way to do it is by setting up automatic drafts from their paycheck into a savings account.