MML Alex: Saving early for retirement

If there was ever a buzzword for my generation, it’s instant gratification. We want what we want, and we want it now. Since I’m a part of this, I am being pulled in different directions when it comes to saving for retirement. Most advice on finances consists of “don’t put it off” and “the early money is the best money” whereas my generation says to enjoy your life now. I work in personal finance, so you’d think I would be on the side of the former no questions asked. Not necessarily. A part of me still questions saving into a 401k.

After my first few months full-time have passed, I’ve hit 4 digits in my retirement account. This is money I could invest in other places, save to buy my car, or pay student loans with. But because I put it into a 401k, I won’t be able to touch any of it until I’m 59 1/2 years old without heavy fees. For your perspective, that is in 37 YEARS.

Instant mortality check. It sucks, but I can’t help but think what if I die? All that money I’ve put away and not used was for no reason. The idea I come back to when my mind goes here is my eventual family. The money would go to them, which makes me feel a lot better. I know the whole thing seems dramatic, but when you are 22 with a ton of student loans and a car to buy this is where your mind goes. You can’t help but feel that money could be put to better use. It’s a great test in patience and sticking to a higher goal. I’m still putting tons of money away for loans and car savings (around 75% of my take-home pay, remember I am still living at home… for now), so it isn’t like I’m stagnant.

The retirement account itself is a labyrinth too. There are a solid 25 different investment choices available, but I don’t have the knowledge of what it all means. It’s intimidating when you want to make the right decision with something as important as your retirement money. I can’t be the only one who feels this way.

Through all of this, I have learned a few things. If you have a company sponsored retirement plan, hit the match at very minimum. The great thing about it is you don’t even know it’s gone because it disappears before you get your check. So even though I’m caught between the struggle of saving for later or enjoying now, all I had to do was complete one good action (signing up for 10%) and the rest is taken care of automatically. By the time a couple years goes by, I’ll never miss the money and will enjoy seeing my 401k bump up consistently. Then I can start planning how I’ll ball out during retirement with the money I’ve saved. A much more enjoyable way to think about it.

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