FIND A LOCATION:
Find a Location
FIND A LOCATION
Call the Branch
Access online accounts
by Matt Bushard, Wealth Management Advisor
Starting your first job can be overwhelming.
Besides a new workplace, co-workers, rules and responsibilities, you may already have student loan payments, car payments and rent, plus other financial considerations.
It’s easy to become overwhelmed by your first “real world” finances, so the most important thing is to take it step by step. Start your financial checklist, and concentrate on one thing at a time.
Take these steps to make sure you’re getting off on the right financial foot.
When applying for jobs, make sure you consider benefits as well as salary. With rising healthcare costs and uncertainty over what Social Security benefits may look like in the future, it’s especially important to pay attention to an employer’s health insurance and retirement plans.
Although flexibility is important, leave and vacation time should be evaluated in conjunction with potential salary, health insurance, and retirement benefits.
If the employer contributes to a high-deductible health savings account (HSA), that’s an added benefit. An HSA is like a 401(k) for health expenses – you don’t have to pay taxes on it. It’s very beneficial if your employer is willing to help with those costs.
Some employers also offer student loan reimbursement. If you’re burdened by college debt, ask potential employers if they offer student loan reimbursement as part of their benefits package.
Once you have a job, if your employer offers a 401(k) plan, start contributing at least the minimum amount to receive the full employer match. Typically that’s about 3 to 4 percent of your salary.
Try to contribute at least 10 percent of your salary, between what you and your employer put in, if possible.
Whenever you get a raise, contribute a portion to your retirement plan until you are contributing the maximum amount allowed.
If your employer does not offer a retirement plan, set up an individual retirement account (IRA). There are various IRA options to choose from.
Put a little bit – as much as you can afford – into savings every month until you have built up an emergency savings account of three to six months’ salary.
Plan to put this money into your savings account at the beginning of every month or each time you receive a paycheck. Do not wait until the end of the month to see what you might have left over. This is especially important for people who work on commission or have a more uncertain income.
Only touch this fund for emergencies.
Low-cost index funds have become extremely popular investment vehicles for millennials, who have longevity on their side.
Passive investing, using index or portfolio funds, has become popular. It’s relatively inexpensive, so it takes less out of your returns.
Roth IRAs are also becoming more popular. If you aren’t contributing the maximum amount allowed toward your retirement, contributing to a Roth IRA can be a powerful tool – and even more advantageous if you are in a lower income tax bracket than what you expect to be in retirement. With a Roth IRA, you’re putting in after-tax dollars, so you’ll have a tax-free bucket of money to draw from when you retire.
Take things one step at a time – and remember, as a millennial, you have longevity on your side.
Call us at Bell. We can help make sure you’re taking the right steps toward a more secure financial future.