How to Start Saving for Retirement (Even if You Haven’t Even Graduated College Yet!)


Sure, it might seem preemptive to start thinking about retirement when you’re still a current student or recent graduate. But, the sooner you start stockpiling spare cash, the more your retirement savings could compound by the time you’re ready to stop working.

In other words, now is the time to get started!

The scary part is, almost half of Americans ages 18 to 30 had no retirement savings at all, according to a 2016 poll. And with traditional pensions a thing of the past for most workers, it can be harder than ever to jumpstart your savings. 

“Will I Be Able to Retire When I Want to?”

While nothing’s certain, keep in mind that young people who start saving for retirement right now are in the ideal position to meet their future goals.

That’s because something called compound interest is on your side. Compound interest is calculated not just on the principal (the amount of money you invest), but on your accumulating interest. In other words, you’re earning interest on interest! That means your money will continue to grow even if you don’t add to it.

To see how much you could potentially save, use a compound interest calculator like the one at It may surprise and reassure you to learn that even relatively modest savings, if deposits are made regularly, can grow into something significant.

Types of Retirement Plans That May Help You Reach Your Goals

Some workplaces offer 401(k) plans, which are employer-established retirement plans that save pre-tax money straight out of your salary. (Some employers even match up to a certain percentage of employee contributions).

However, what if your workplace doesn’t offer a 401(k) benefit? In that case, you could open an IRA, or Individual Retirement Account. A Traditional IRA lets you make tax-deferred contributions to a fund that you can withdraw when you’re ready to retire. A Roth IRA does not feature tax-deduction benefits, but distributions of the funds are not considered taxable income. (A financial professional can help you decide which to choose.)

The Student Loan/Retirement Plan Predicament

It can be tough (read: depressing) for college students or recent grads with student loan debt to start thinking about retirement. However, just because you’re making student loan payments doesn’t mean you shouldn’t also start a retirement plan. Both student loans and retirement savings may allow you to make deductions come tax time, if you’re eligible.

And, investing in your retirement now is a great way to balance current concerns (paying for college) with your future goals…whether they involve retiring on a beach somewhere, or helping your grandkids with their college costs.



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