Retirement 101: What You Actually Need to Know
The earlier you start, the less you need to save Starting at 25 vs. 35 can mean contributing half as much to end up in the same place. Time does the heavy lifting. You just have to begin.
Retirement feels impossible when you're focused on this week's bills. But here's the thing: starting small and early beats starting big and late. And there are accounts designed to help your money grow faster.
Why retirement accounts matter:
- 401(k) and IRA money grows tax-free (or tax-deferred)
- Compound interest: your gains earn gains
- Employer match = literally free money
What's an employer match?
If your job offers a 401(k) match, they'll put in money for every dollar you contribute, up to a limit. Example: "50% match up to 6%" means if you put in 6% of your paycheck, they add 3%. That's a 50% instant return.
How to think about it:
- Contributing nothing: leaving free money on the table
- Contributing up to the match: getting all the free money
- Contributing more: even better for future you
What if you can't afford to contribute?
Start with 1%. Seriously. Most people don't notice 1% missing. Then increase by 1% every time you get a raise. You'll be at 5-6% before you know it.
WHAT TO DO TODAY:
- Check if your employer offers a 401(k) (ask HR or check your employee portal)
- Find out if they match, and how much
- If you're not enrolled, enroll at 1% (even just to get started)
- If you are enrolled, check if you're at least getting the full match
