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Retirement Checklist for Your 20s

In your 20s, the most important step is getting started, and the smart habits you establish today can help benefit you later. Here are some tips to consider.

1. Start saving

  • Calculate how much to save each month:

    • Use our retirement savings calculator in My Retirement Plan® to estimate how much you should be saving toward retirement each month.
  • Think about participating in your retirement plan at work

    • Take advantage of the retirement savings plan your employer offers. Qualified employer sponsored retirement plans (QRPs) like 401(k), 403(b), or governmental 457(b) are simple and convenient. The money is automatically contributed to the plan from your paycheck, allowing you to save, not spend.
    • Does your employer fully or partially match your contributions? If they do, try to contribute at least up to this amount. This is free money you don’t want to pass up.
  • Save even more with an Individual Retirement Account (IRA)

    • If your employer does not offer a plan, consider opening an IRA and contributing the maximum amount each year to an IRA.
    • You are still eligible to contribute to an IRA whether or not you contribute to a QRP. Traditional IRAs offer tax-deferred growth potential. Roth IRAs offer tax-free growth potential.
  • Set money aside to save automatically

    • First, decide on an amount to put aside each month. Choosing an amount to save is a very personal decision. You will want to meet with your financial professional(s) to discuss your specific goals and objectives to help you determine an appropriate amount to save.
    • Decide whether to join your employer’s QRP, set up a recurring transfer to an IRA, or both. You can set up an IRA online, set a desired contribution amount, and adjust the amount you contribute as necessary. 
  • Build an emergency fund

    • Try to set aside an amount equal to three months' income in a savings account. This cushion can help you weather an emergency without dipping into your retirement savings.

2. Watch your spending

  • Create a budget

    • Understand what you’re really spending each month by creating a budget and keeping track of your spending. Wells Fargo’s My Spending Report helps you review your spending to find ways to fund your retirement.
    • Review your monthly bills, sometimes a quick call to your cable or phone service provider to ask about customer specials can result in unexpected savings.
  • Keep debt under control

    • Lower monthly payments and high-interest debt with Wells Fargo's Debt Pay Down Solution®, a simple way to pay down debt faster.
    • As you reduce your debt, consider using the available cash to invest more for retirement and other long-term goals.

3. Learn more

  • Understand two key concepts of Retirement Planning 

    • In your 20s, there are two main keys to retirement planning: regular contributions and asset allocation. 
  • Learn how to invest and allocate your savings 

    • Explore different options, such as creating your own investment portfolio and speaking to a Financial Advisor for help.

We are here to help you take the steps that are right for you. To get started, contact a Wells Fargo Retirement Professional today.

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