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Entity reports on how millennials can start a retirement plan.

When you imagine retirement, what do you think of? Traveling the world with nothing but a pack on your back and your soulmate by your side? What about turning your business meetings into afternoons spent tanning by the pool? Whatever your retirement dream looks like, they all have one trait in common: You need to be taking steps now to enjoy yourself later.

You can never be too young to start thinking about your future retirement – especially if you don’t want to be one of the 45 percent of Americans who don’t have any retirement savings. Not sure where to start? Here are five ways to kick-start the most enjoyable retirement experience possible. 

1 Start Saving ASAP

Have you ever been taking a test when you saw an answer that seemed too obvious to be true? This tip is like that – but 100 percent accurate. No matter your age, you should start setting aside money for your retirement fund. As Cynthia and Mike, a couple who just recently retired, explain, “Even 10% of your paycheck from the very beginning will add up quickly due to compounding interest when you start early in your twenties.” 

READ MORE: Smart Investments You’ll Thank Yourselves For

Set a goal of putting a small portion of your salary into your retirement fund every payday. To keep yourself accountable, you can set reminders in your phone or computer, tell friends or family about your goals and even schedule small (free) rewards – like breakfast for dinner or a movie marathon with friends – when you reach new milestones.

2 Become Your Own Retirement Expert

What lifestyle changes, investments and goals should you make in order to create a happy retirement? If you can’t answer the question, it’s time to go back to school … in terms of learning the retirement basics, anyway.

What should you make sure you study? Important topics include:

1. Starting and managing a 401(k) if your employer offers a retirement savings plan. By contributing all you can to it, you can lower your taxes and your company may add in more money. As ENTITY has written before, when starting your 401(k), make sure to learn how much you need to contribute and how long you need to keep your job to get the full bang for your buck.

2. Check out your employer’s pension plan – as well as your spouse’s. Make sure you understand whether you’re covered and how much benefits you would receive.

3. Learn basic investment rules – like diversifying your portfolio and understanding how inflation could affect your funds.

Bottom line? Follow the Department of Labor’s advice and realize that “financial security and knowledge go hand in hand.”

READ MORE: So You’ve Got a Great Business Idea … Here’s How to Find Investors

3 Avoid Debt

Have you ever found a cute little black dress or a pair of rose gold earrings on sale and told yourself, “I really shouldn’t” – only to buy it anyway? We all know that avoiding debt is easier said than done, but that doesn’t mean you shouldn’t try. One of the most relevant debt considerations is college. In fact, many millennials have so many student loans to pay off, they can’t start saving for retirement until they reach their early 30s. Since that’s also the time people start forming families, saving for retirement can become even more challenging according to Money Mastery.

How can you make sure you’re saving more than the average millennial? Besides paying off your college loans, you can follow Cynthia and Mike’s advice and “live below your means.” By following a budget that is lower than your paycheck, “you will have extra in the bank for emergencies and more opportunities and choices in the future.” Sure, those Louboutin high heels would add some elegance to your girl’s night out, but are they worth stressing about retirement years down the road?

4 Calculate Your Goals

So what exactly do you need to save? While the monetary amounts differ between people and locations, most experts suggest planning to live on 80 percent of your pre-retirement salary, which includes income from Social Security, pensions and other savings, once your retire.

You should also consider what kind of retirement lifestyle you want. Would you want to live in a Florida beach house or a small cottage in North Carolina? Do you want to travel around Europe or stay at home? You should take all of these plans into consideration and adjust your budget accordingly. 

5 Keep Your Eye on the Prize(s)

As you begin saving money for retirement, don’t be discouraged by slow investments. If you need some encouragement just read this: If you save $5,500 in an Independent Retirement Account for 30 years, you’ll have built a nest egg of over $900,000. All you would need to invest is $458 per month. If you can’t get there yet, make this your goal – and your dream retirement may turn out even better than you think.

READ MORE: A Basic Guide to Investing

Also, don’t focus on money so much that you sacrifice your health. As Cynthia and Mike say, “Health is as important as wealth.” Not only will exercising, eating a healthy diet and finding time to relax lower your future medical bills, but it can also make “today” far more enjoyable! Saving money for the future doesn’t mean you have to sacrifice having fun; it just means you’re enjoying the present moment while keeping your future happiness in mind.

Whether you’re a businesswoman who dreams of exploring different cultures or a fashion designer who just wants to garden in your hometown, saving for your retirement is an important – and realistic – goal. As long as you save up now, your imagination is the only limit to what your future holds. 

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