If you’ve recently graduated, congratulations!
Now that you’ve got a degree, it’s time to enter the workplace, find a job, and start planning your financial future. As tempting as it is to spend your first paycheck, the wiser thing to do is devise a financial plan and start saving right away.
Saving can be difficult if you’re saddled with student debt, as so many young graduates are. So you have two competing goals – pay your loans and save for retirement.
If you want to retire with $1 million, do the math! The sooner you begin saving, the less you’ll have to set aside each month to reach that goal.
What you can save will depend on how much you earn and how much you spend each month. Although graduates expect to earn $60,000 a year at their first job, in reality, the average salary in America is closer to $48,000. After taxes, you’ll have about $33,000.
If you start at 23 years old, you only have to save about $14 a day to get to that goal by age 67. This amount assumes a 6 percent average annual investment return and works out at about $415 every month.
In 2017, the average amount a graduate owed in student debt in America was $28,650 according to the Institute for College Access and Success.  The Federal Reserve says that the amount the average student debt repayment increased to over $390 every month by 2016, up from $227 in 2005.
You should look at the interest rate on your loans and the return you are getting on your savings and investments.
At least make contributions to a 401K that will earn the employer match. Many Millennials are managing to save. On average, this generation has around $26,475 saved for retirement.
Student loans can be a real worry, but if you get ahead of your repayments and start saving as early as possible, you will be able to settle into retirement earlier than you think. It's important to note that some experts predict that the job market in America is going to require more skilled labor with a degree, so going to college is not going to be a luxury but a necessity. Our future generations are going to need to get a college education to be able to afford to save for any retirement at all. So figuring out how to pay off student debt as well as save for retirement is going to become the norm.
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