How to Prepare Your Retirement Since Your 20s

Start saving from now for your retirement. With this, you have the power of time. leverage that.

Anything you put away is better than nothing. Set aside just $500 a year (that's about $40 a month) over your first five years, and you'll have nearly $30,000 more at retirement than if you had saved nothing then. If your company has a program that matches your contributions to a 401(k) retirement account, take advantage of that. It's like free money (even though you can't touch it for another 40 years). and it's smaller chunk out of your check than you may ralize. Unlike your salary, the government doesn't take taxes out when you put money into the 401(k) plan, so funneling $100 to your account takes only about %85 from your take home-pay.

If your company doesn't have a retirement plan, open a Roth IRA, which allows your contributions to grow and be withdrawn tax-free. They're offered by most banks and investment companies; Vanguard and Fidelity, which offer many low-cost investment options, are good places to start. Look for funds with low costs or "expense ratios" below 0.5%.

Tip : Bring your lunch four out of five days a week, and you'll save $800 to $1,000 a year on average. That's a good bit of your first year's retirement contribution.

Tool : use the retirement calculators at to see how fast your savings can grow. You'll be feeling rich in no time.

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