We’re Old, but We’re Not THAT Old. Right?


Chances are you have come upon QLC because you are like me. I know I’m old enough to be responsible for myself, but the question remains as to how far this whole “taking care of myself” thing goes. I mean, if we do our own laundry and know how to cook about five meals, we’re doing pretty well, right? While this may be true, our responsibilities don’t end in the laundry room or the kitchen. We have to watch out for ourselves on the financial front as well, which even includes retirement. Yep, you read that right. That thing that is at least 30 years away. Sigh…

Even though most of us are just starting our careers and may have just landed our first steady job, it’s never too early to start saving for retirement. As twenty-somethings we have a huge advantage when saving for retirement, and that is time. The more time your money is in an IRA, 401(k) or both (I will get to those in a second), the more it will grow exponentially. If you strategically invest $2,000 today, it can easily yield a higher return than investing $5,000 ten years from now. So lets get this retirement fund party started, long before you start looking at gated communities in South Florida where you can play golf!

The two best ways to invest in your retirement when you are in your twenties is to put money in a 401(k) or a Roth IRA. Check ‘em out.

In very simplistic terms, a 401(k) is a pension account that many employers provide as an option to their employees. If you sign up for your company’s 401(k), a certain amount of money will be taken out of every paycheck and be put into an account that you can take money out of when you retire. Many people have 401(k)’s because their employers match their contributions, meaning that you are getting free money from your employer! It’s a bonus that you get in decades, but hey, it’s a bonus that’s silly not to take advantage of.

Now, a Roth IRA is a retirement account that you can invest up to $5,500 a year in. The money that you invest in this account needs to be earned through a documented job and you must pay taxes on your earnings before they are invested. This is great for people with multiple jobs, those working for start-ups and even for people who have a 401(k) as well. Unlike a 401(k) account, you have full control of where this money is invested (the investments that you make in your 401(k) go back into the company that is providing it).

You can’t take out money from a retirement account until you are in your 60’s without paying a penalty, so make sure you are ready to kiss the money you invest in your retirement account goodnight knowing that it won’t wake up for years. And years.

I promise that you will become addicted to investing in your retirement once you start, so take the jump and you will be well on your way to enjoying your newly bought beach condo in 2050!

By Jenna Heffernan

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