“Why didn’t we learn about this stuff in college?” This common refrain echoes among Millennials starting to think about budgeting, 401(k)s, IRAs and other financial matters. These five questions are at the top of the list of “things we never learned”:
- How much should I save for retirement? It depends. Start by figuring out how much you’ll need to retire comfortably and work your way backward. Use a retirement calculator like everence.com/retirement-calculator to see how much monthly income your retirement savings may provide.
- What is an employer match? An employer match is lovingly referred to as “free money.” Your employer may contribute a percentage of your salary to a retirement plan on your behalf. If so, you will need to pitch in to receive this “free money.”
- Wouldn’t it be fun to pick individual stocks instead of investing in mutual funds? It might be, but for a long-term retirement plan, it’s wise to put your eggs in multiple baskets (diversify).
- Can I wait to start saving for retirement until I’m (insert arbitrary age here)? The earlier you start saving, the more your money can grow through the magic of compounding interest.
- How do I know if I’m on the right track? Talk to a financial advisor. Remember, you are in control of how much you spend and how much you save. You’re also in control of how your money is invested. If you want your dollars to speak up for workers around the world, the environment and sustainable businesses, consider a socially responsible investment option.