How To Carry Debt & 8 More Retirement-Savings Tips For Millennials

55978908_sMillennials in their first job and first apartment can be tempted to think that their only financial responsibilities are to cut a check for rent, pay subway fare, score movie tickets, buy a few clothes and pick up the pizza tab.

But time passes quickly, and if you’re not careful you can fall way behind in your retirement planning.

“We know it’s hard,” said Carla Dearing, CEO of SUM180, an online financial planning service. “When you’re young, you think of retirement as something in some very distant future. But to be ready when that time eventually arrives, you’ve got to take some first steps now.”

SUM180 caters to women. But Dearing says her advice applies equally to both genders.

To help young adults save for retirement, Dearing offers nine tips. “These are simple and doable,” she said.


  • Create a budget. This enables you to understand exactly how much you spend for living expenses in general, and on what. Getting a handle on your cash flow and income will let you figure out exactly how much retirement savings you can afford. If you need help, consider online budgeting tools at sites like and
  • Create a rainy-day account. Stuff happens. And it will probably cost you money. You should create a pool of cash that you can use to pay for things like fender benders and surgery for Fido. What does this have to do with retirement? Any drain on your finances potentially hurts your ability to fund retirement accounts, so you should plan in advance to cope with financial distractions. Your rainy-day fund should be separate from the checking account you use to pay regular bills, so that you’re not tempted to tap it for beer, groceries and utility bills. Aim for a cash kitty that is six times your monthly expenses. How do you know how much that is? Because step 1 was to create a budget.
  • Feed one or more retirement accounts. Whether it is a 401(k), an IRA or some similar account, it is essential to start contributing money as early as possible. Your grandparents may have received a monthly benefit check during retirement from an old-fashioned pension plan, but you can’t count on that. In the private sector, they’re all but extinct. The good news is that accounts like 401(k)s and IRAs give you tax breaks, either when you contribute or when you withdraw money decades later. They also let your money grow without being taxed every year. And consider using Roth-style accounts, which should provide a young saver with more after-tax spending money than regular 401(k)s and IRAs.

Click here to read the rest of this article.