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Retirement Planning in Your 20's

When you’re in your 20's you are worried more about starting your career than you are about what you’ll do when your career is over. Still, it’s important to put down some building blocks at this point to lay a solid foundation for your financial future. Here are five tips to get the ball rolling:

Develop financial habits

You will want to become well-versed in the process of saving. Cash flow may be an issue in the present, but your future self will thank you for not letting your expenses get in the way of your retirement savings.

“These years of saving in your early 20's are your prime years. If you deny yourself the opportunity, it will just set you back with retirement planning in the long run,” says Certified Financial Planner Brian T. Jones on Bankrate.com. “You’ve got to have balance.”

To help, you’ll want to develop another habit, one of overall financial organization, recommends Robert Berger of U.S. News & World Report Money. Any simple system for storing digital and hard copies of records will end up saving you a ton of time, hassle and money in the future.

Stick to the basics

When you first start learning about 401(k)s and hearing terms like “diversification,” it can make you turn into a deer in headlights. Don’t let that talk deter you from starting your retirement investments. In the beginning, the simpler the better. There are several options out there that automatically invest you in a portfolio, including a broad range of stock and bond index funds.

Of course, investing won’t get you anywhere if you haven’t saved up anything to invest.

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