5 Retirement Mistakes to Avoid in Your Twenties

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1c0a1f7c38594dc4b960a1c30423efb3 (1)Saving for retirement is admittedly not at the top of the goal list for many twenty-somethings. Between paying down student loans and trying to make enough so you don’t have to live with your parents, there always seems like there’s just never enough money to put anything aside for retirement.

Besides, aren’t your twenties the time when you should be traveling, being care-free, and living it up at the hottest restaurants and nightclubs?

While you may think retirement is some far off goal, it’s important to not let it go by the wayside.

Here are five retirement mistakes a lot of 20-somethings make—and you should totally avoid.

Not Investing NOW

Refusing to invest money now because you think retirement is too far away to worry about is a big mistake. Retirement will be here before you know it, and thinking that you’ll have enough property or funds to get through retirement is just not smart. It’s important to start saving now, no matter how little you can contribute.

Thanks to the power of compound investing, your most important asset right now is time. Your money has plenty of time to grow and compound until you retire.

Not Receiving the Full Company Match

Many companies will offer you a match in a 401(k) type investment vehicle. A company match is essentially a bonus the company gives you as a reward for being prudent and investing in your own future. For example, if you invest 3% of your annual salary, the company will add an additional 3% into your 401(k), giving you a total of 6% into your retirement savings. Not bad!

Not Investing Until You Make More Money

Many young people always assume they don’t make enough money to put anything toward retirement. My first paycheck from my first full-time job out of college was $800 after taxes. Even then, I still managed to contribute enough toward my 401(k) to receive the full company match. If you sign up as soon as you get your job, you won’t even notice the money is missing.

Not Being Aggressive in Your Investments

When choosing an investment portfolio, there is no need to play it safe right now. Choose an aggressive portfolio. You have plenty of time to weather the ups and downs of the stock market. You can play it safer as you get older.

Not Diversifying

Don’t stick to only one investment. As the saying goes, don’t put all your eggs in one basket. Diversifying helps you make sure your investments aren’t all entirely dependent on the fluctuations of the stock market. Research different opportunities, speak to a financial advisor, or talk to your retirement planner through work to help you figure out the best way to achieve a competent diversified portfolio.