Here are some retirement basics for millennials.
Create a budgetOne of the first steps you can take in financial planning is to give your budget a review. If you haven't created a budget, now is a great time to start. Track your income and expenses, including student loans, utilities and any other debt you're paying on a monthly basis. From there, you'll have a much better idea of your financial picture and you can start earmarking some of your budget for your retirement savings.
Make the most of your 401(k)Today, many employers offer 401(k) plans as a part of a benefit package. A 401(k) is a type of retirement account where you can contribute funds out of every paycheck. A lot of employers offer matching for either all or part of your contribution — this is basically free money, so it's a good idea to take them up on the offer. Also, if you work in the government, education or nonprofit world, you might have other employer-sponsored plans available to you such as 457 and 403(b) plans. Think about other retirement accounts A 401(k) isn't the only way to save for retirement — there are other retirement fund options out there, as well.
You can also open an Individual Retirement Account (IRA) and fund that on your own.
Depending on the type of IRA you open, you can enjoy some tax-advantages when retirement comes.
Plan to pay down debtsSomething a lot of millennials are familiar with is student loan debt. This payment can take up a chunk of your income, leaving you with little for emergency savings or retirement.
Call your student loan provider and see what your options are. You might be able to combine a bunch of loans into one payment with a lower interest rate, negotiate your balance or set up an income-based repayment plan that allows you to save a little bit more each month.
Watch your credit cardsIf there's one area where a lot of people get into trouble, and millennials are no different, it's credit card debt. Check your statements and your balances and see where you can begin to pay down your cards.
If you don't carry a balance on your cards, call your credit card company and see if you can have your limit increased. Having more credit available to you can help improve your credit score.
Consider life insurance
You might be young and healthy, but if you have loved ones you'll want to protect them. Life insurance can help give your loved ones some financial stability if you unexpectedly get ill, injured and/or pass away.
A life insurance policy can leave a death benefit to your loved ones, giving them the funds to pay down debts, replace your income and pay for expenses such as a mortgage.
A big part of gaining financial independence is taking care of your retirement. Even though it's decades away, the sooner your begin focusing on it and planning for the future the better.