Mark Henry, a certified estate planner as well as founder and chief executive officer of Alloy Wealth Management, offers five tips that parents can pass on to their young-adult children to help them start planning for retirement:
“While they reason that their salary is low as they start out, and they have bills, they need to make saving a disciplined habit, starting with just a little,” Henry says. “It’s not going to be easy to start saving later; you make more money, but then you’ve got more expenses. So start the important life habit now, and it will be easier then.”
“Young workers should at least understand the purpose of target-date funds,” Henry says. “Many plans offer these funds, which automatically adjust how a person’s money is invested based on their age and how close they are to retirement.”
“Throw in the fact that pensions are gone for the most part — and their parents’ generation felt the brunt of this fall-off — and the kids should pay heed to a great way to save,” Henry says. “And the percentage a company matches the 401(k) is an important consideration.”
“With this foundation, they’ll learn how rewarding it is to set a savings goal and regularly put aside money to reach it, which is the basis for successful retirement investing.
“Parents today know the younger you are when you begin retirement investing, the more money you can have when it’s time to retire,” Henry says. “They need to emphasize that to their kids, and they can teach them by starting with simple concepts and building on them over time.”
Mark Henry is a certified estate planner as well as founder and CEO of Alloy Wealth Management (www.alloywealth.com). Henry has more than 30 years of experience in business and finance. He is also an investment advisor representative.
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