Chances are, if you’re in your 20s, saving for retirement is the last thing on your mind.

After all, you may still be paying down student loans, and dealing with credit card debt. You may have entered the workforce during a challenging economic time, and wound up with a job that is paying less than expected. And then there’s your rent and other living expenses. Why worry about retirement when it’s a lifetime away?

The answer is simple: If you start planning now, you are taking an important step that can potentially make it easier for you in the long run. Because you’re young and have time on your side, anything you manage to save today will have that much longer to potentially grow for tomorrow. You’ll also benefit from the power of compounding: As your savings accumulate interest, that additional money will earn interest as well.

So where to begin? A few things to consider as you plan for your retirement:

• Assess Your Situation. Before you do anything else, take the time to see where you stand. Do you like your job? Are you making enough money? Is there reason to believe you might get a raise, or—on the flip side—be laid off? Also take a look at any savings you already have. If you were to lose your job tomorrow, do you have enough set aside to keep you afloat?

• Build a budget. Depending on your answers above, you may want to A) start looking for other employment opportunities; B) start building an emergency fund (aim for 12 months worth of your income); and/or C) create a budget that will allow you to live comfortably and save at the same time. To build a budget, make an itemized list of all your debts and expenses and stack them up against your total income. If you’re in the black, you’re off to a good start and you should consider applying all or a portion of the surplus to your retirement savings. If, on the other hand, the number is negative, you have work to do: Consider cutting back on your spending, paying close attention to unwarranted excesses. Can you live with a roommate (or possibly your parents) instead of renting on your own? Do you really need to own that new car, or can you make do on foot or on bike? These are some of the decisions you’ll have to make.

• Tackle your debts. If you have any credit card debt, you should make every effort to pay it off as quickly as possible to avoid high interest rate charges. The same can be said for your school loans, although you can potentially pay them off last, especially if you are in a position to deduct the interest from your taxes. Either way, do your best to eliminate debt so you can put the extra money toward future savings and a retirement income plan.

• Start saving. A rule of thumb: Try to save a minimum of 15 percent of your annual gross income, and put a portion of this money in an IRA retirement plan or long-term investments that may grow over time. And if you’re lucky enough to have an employer-sponsored 401(k) retirement plan? Invest in that as well, making sure you contribute at least the minimum required to take advantage of any company “matching” funds.

Do what it takes to start saving in your 20s, and you’ll be prepared for whatever life brings, be it marriage or children or a new home or vacations. Most importantly, though, you’ll be helping yourself get ready for retirement—which is the payoff you’ll get for planning ahead.

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2023-150939 Exp. 2/25