Many Americans are setting themselves up for a retirement catastrophe. There are frequent articles that discuss the number of Americans who have nothing saved for retirement, and other articles mention the individuals who can’t afford unforeseen expenses. In order to alleviate the stress of securing a stable future, you should begin preparing in your 20s when you have entered the workforce and can reasonably set aside some money for retirement. The earlier you start to plan for retirement, the better.


Negotiate a Raise

A stagnating salary can keep retirement savings at a minimum. That’s why it’s important to negotiate a high starting salary. By starting at a higher income, any raises that come will likely be larger because a 3% raise on a $50,000 salary will be $600 more than a 3% raise on a $30,000 starting salary. Additionally, when it comes time to deal with yearly performance reviews, you should come prepared; show the value you’ve provided to the company to get a bigger raise. The higher your income, the more you should be able to save.


Pay Down Debt

Debt is an anchor that keeps many people from reaching their retirement goals. The worst form of debt is credit card debt because of the high interest rates that accompany it. By paying down debt, more of your income can go toward other goals. Retirement should be one of these goals. If you’re starting out in your 20s, you’ll be able to put forth a significant contribution toward your retirement.


Sign up for a 401(k)

If your company offers a 401(k) plan, sign up. Workplace retirement plans are one of the greatest tools for building wealth that are available to employees. Many companies are willing to match contributions which can greatly accelerate the amount of retirement savings you have upon retiring.


Start Early

Your 20s are the perfect time to start saving for retirement. By paying off debts and taking advantage of the tax benefits that an account like a 401(k) or a Roth IRA offer, it’s possible to allow a nest egg to grow tax-free for decades. The earlier you start, the more your funds will grow. Small infusions of capital can grow to massive nest eggs over a period of three or four decades. By saving a fixed percentage of your income and increasing it as your income increases, you can set yourself up for a high level of financial success.