As a group, Millennials seem to struggle financially more so than their predecessors. Saddled with substantial student debt, low wages, and inadequate financial education, Millennials often lack retirement plans. Even though it is commonly advised that individuals begin planning for retirement as early as possible, it is never too late to begin. Millennials can get back on track by adhering to the following pieces of advice to secure their future.


Emergency Fund

For Millennials, setting aside an emergency fund should be a top priority. Contributing as much money as you can over a period of time to a separate account can help you prepare for unexpected expenses without putting your financial security or livelihood at risk. Should an emergency arise where something needs repairs or you become unemployed, this emergency fund can help support you without causing additional stress. It is advised that Millennials invest roughly 10% – 20% of their income into such a fund.


401(k) Contributions

Most companies offer matched contributions to a certain point with 401(k) plans. Millennials should be contributing to their 401(k) plans with this in mind. Put simply, if you are not contributing the amount that your company has agreed to match, you are missing out on free money. The nice thing about 401(k) plans is that it does not require active management unless you experience a career or financial status change.


Roth IRA Contributions

One of the perceivable downsides to a traditional 401(k) is the limits of withdrawing funds; while individuals can make a withdrawal from their savings before they reach the age of retirement, they will incur a penalty of 10% in addition to tax deductions. If Millennials aspire to retire early or simply want to ensure they have reserve funds for large investments such as a home or vehicle, a Roth IRA is a suitable alternative or supplement.


Build Net Worth

Many Millennials lack sufficient knowledge regarding investing, especially when it comes to the stock market, and this often dissuades them from getting involved. When you have money beyond living expenses, emergency fund contributions, and 401(k)/Roth IRA contributions, you may be tempted to spend or save it, but a more productive application of these spare funds is investments. Investing a small amount of money in the stock market can help grow your net worth exponentially over the period of a few years or decades. Like the 401(k) plan, this can be a low-involvement financial strategy that can help Millennials secure their retirement.