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Helpful Tips from Jodee Werkheiser
Many students wonder when they should start thinking about retirement. Should they wait until they get a full-time job at a big corporation, or should they start now with the little money they have?
The answer to that question is that if you want to retire comfortably, you should start planning now! Even though you may be working a part-time job, you can still put a certain amount of money aside for retirement. You don’t have to put a lot aside, but even a little money saved now can become a lot later.
One big mistake most college students make is thinking they have plenty of time before retirement. The earlier you start saving, the more time your money has to grow and work for you.
One simple financial habit that any student can build now, which will help in the long run, is setting aside a certain amount of money from each paycheck for savings and retirement. It doesn’t have to be much, but starting is the key.
One way you can help prepare yourself for retirement is by taking some personal finance classes. Black Hawk offers numerous classes to help you learn how to invest and prepare for retirement. BUSN 195 – Personal Finance and BUSN 215 – Personal Investing would be two great places to start.
Some investments you can start now as a college student are a Certificate of Deposit (CD) and an Individual Retirement Account (IRA).
A CD is a type of savings account offered by banks and credit unions that locks your money in for a fixed period of time in exchange for a higher interest rate than a regular savings account. CDs are a nice way to start saving since there is no recourse involved, unlike most other investments.
The other option would be to start an IRA. Unlike the CD, you would need to be working to add money to the account. You don’t need a lot of money to start an IRA, but it’s important to contribute to it regularly, even in small amounts.
There are two different types of IRAs: a traditional IRA and a Roth IRA. The difference is that when you pay taxes on the money in a traditional IRA, you do not pay taxes on the money, but when you take it out of the IRA, you will pay taxes. The Roth IRA, however, you pay taxes before the money goes into the account and you don’t pay taxes on the money when you take it out.
Lastly, there are many investment options that people don’t know about, and it’s up to you to explore them and get started. The sooner you begin, the sooner you can let your money work for you – and possibly retire early.
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