5 Reasons Why You Should Start Saving for Retirement Now

by Nicole Ryan, Student Blogger

I know what you are probably thinking, “I’m way to young to start saving for retirement.” You’re college students with your whole lives ahead of you, why start thinking about something so far down the road now? Well, the truth of the matter is that right now, time is on your side. It doesn’t matter how much you put away, it could be as simple as five dollars a month. No matter how much it is, getting an early start on saving for retirement can only benefit you in the end.

Starting Early: Obviously, the earlier you start saving, the more money you will be able to save. Starting early with a retirement savings will help you through those rough patches where you really can’t afford to save, job changes, and spares you the fear and stress of having to scramble to start saving when you’re getting closer to nearing retirement.

Compound Interest: If you are saving your money in an account that gives you compound interest, you will have plenty of time to actually receive the benefits compound interest can offer.

Starting Good Habits: Beginning to save for retirement now can help you develop beneficial saving habits that you can carry with you throughout your life. Learning these habits now can help you avoid financial trouble in the future.

Preparation: If you start saving now, you’ll already know what you need to do to continue to save for retirement once your graduate school and begin working. Not only are you saving, but you’re learning at the same time.

Developing Good Credit: Using credit cards may not seem like a way to save for retirement but in the long run it does impact an individual’s ability to contribute to a retirement account and/or to take other steps toward a financially secured retirement. If you have credit cards, use them wisely and make sure you make all payment on time and you will be helping yourself save for retirement.

None of us want to think about retirement right now. We’re busy being students and trying to get our lives started, retirement is just a far off idea. Even so, whether we want to think about it or not, there will come a day where we are ready to retire and it’s important to make sure you are prepared. All it takes is a little bit of saving now, and you could really help yourself out in the long run. Thinking about and planning for the future is always a good skill to have. So, begin saving now so when the time comes to head off to your cozy condo somewhere in Florida, you’ll have the money to be able to have a relaxing and comfortable retirement.

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5 Things Every College Student Should Know About Retirement

by Danielle Meltz, Student Blogger

As stressful as Gen Chem is right now, your retirement is going to be a whole lot worse if you don’t start thinking about it now. The dream of retiring on a beach, sipping Mimosas and smoking cigars doesn’t come easy. However, the quicker you do it, the less money you’ll have to put into it.

future past presentHere’s an example from CNN Money to show you the difference saving at age 25 and saving at age 35 makes:

If you start a retirement plan at the age of 25, and put aside $3,000 a year for 10 years, and then you stop. By the time you reach 65, your $30,000 will have grown to $427,000. (Assuming it is a tax-deferred retirement account at an 8% annual return.)

If you start a retirement plan at the age of 35, and put aside $3,000 a year for 30 years, and then you stop. By the time you reach 65, your $90,000 will have grown to $367,000.

Saving at the age of 25 provides you with a lot more money, while putting 1/3rd of the money in.


Retirement may seem like a lifetime away, but it’s a good idea to start as soon as you can. Here are 5 things ever college student should know about retirement:

1)      Should a retirement plan be your first savings account?

While retirement is going to be a big priority in your life, in most cases you cannot withdraw the money that you put in. This means if you currently have student loans, saving money to put towards rent and emergency situations is more valuable than having a healthy retirement fund. While starting in your 20’s or during your first job, is the ideal time to prepare for retirement, you should save from 3-6 months of expenses as an emergency fund before you start investing.

2)      How do I get started?

Let’s break down the two main options. IRA vs 401k

IRA (Individual Retirement Account): This is an individual plan which can be either a Traditional IRA or a Roth IRA. IRAs are the biggest option with most college students who are not working full-time jobs. A Traditional IRA gets taxed when you put money in, and a Roth IRA gets taxed when you take money out before you are 59 ½.401K egg-smaller

The question here is whether or not you think you will need the money, for education, or housing, before you are 59 ½. If the answer is yes, then a traditional IRA is right for you. However, if this money is solely for retirement, the Roth IRA might bring more savings.

401K: This is an employer-based plan through full-time and some part-time jobs depending on the employer. The reason employer based plans are often the first and best option is because they are easy, it comes out of your paycheck automatically before taxes. There might be a company match available, which means that they will match up to a certain limit, say 4% for example. This money builds up in your account, without you having to sacrifice more to hit your retirement goal.

3)      Where do I start a plan?

If you have an employer who might be able to match contributions, they are the best place to start at. If you do not though, the real question is which bank to start a plan?

The University of Colorado’s Elevations Credit Union might be a good place to start for new savers. They are used to college students seeking advice, and you can make appointments through their advisory website. You can set up a retirement fund anywhere even if you plan to move out of Colorado when you graduate. It might be beneficial however, to talk to an advisor about the best place to start a fund.

4)      The biggest mistake college students make

Not making a long-term commitment. This can mean not putting enough money into your retirement account, or buying an investment and then quickly selling it due to an unanticipated need, which might lead to losses on your money. Emergency accounts are vital for this reason. You need to be able to commit in the long-term, while have emergency savings you can tap into incase something comes up.

5)      Is social security still a thing?

Social Security currently plays a role in retirement; however the amount available has decreased and will continue to do so for over the years to come. Although the program will still be running in the future, the best decision is to rely on your own individual savings for retirement.

Overall, the biggest way to help you prepare for retirement is creating a habit of saving. By putting money into your retirement account first, instead of at the end of the month. This teaches you how to adjust the money you spend each month. This may sound easy, but it takes years of learning how to budget and financially plan before most people are comfortable with putting their savings before their immediate needs.

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