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How Millennials Can Save for Retirement

Millennials have had a rough go of it—first, they came of age during the bleak job prospects of the Great Recession, then Gen Z started making fun of them on TikTok, and now we’re hearing that they’re behind in retirement saving as a generation. But if you fall into this category, don’t stress about that last one. It’s best to start saving as early as possible for retirement, but if you’ve let that slide until now, it’s time to get started. Here are some ways that millennials can save for retirement.

Man putting money in a piggy bank.

Take advantage of 401(k) matching if you can 

Pension plans are falling by the wayside, with more and more companies turning to defined contribution plans like 401(k)s instead. Be sure to save with your employer’s 401(k) if it’s an option, and max out any employer match that’s available too. For every dollar you’re saving that gets an employer match, you’re already seeing a 100% return on your investment before you even put it into the markets. You don’t want to leave money on the table, so prioritize maxing out your match each year. 

Try to save a higher percentage of your income 

Many people save 10% of their income for retirement, but even that may be undersaving for millennials with an uncertain social security payout. Aim for 12-15% of your income to go to retirement savings accounts if you can. That may seem like a lot to part with from each check, but drawing up a budget may help. And it’s all money you’ll see again in the future. 



Open a Roth IRA 

A 401(k) is just one way to save for retirement. And not every job even offers one. If you want to save more or start saving without an employer-sponsored plan, a Roth IRA might be a good option. Roth IRAs are tax-advantaged retirement accounts that allow you to make deposits after taxes. But then you don’t need to pay taxes on the money you withdraw, as long as you take it out after you reach age 59 ½. This is a good option if you expect to be in a higher tax bracket when you retire. 

Think about a traditional IRA too 

If you expect to be in the same tax bracket or a lower one when you retire, a traditional IRA might be a good option for retirement savings. This is also a tax-advantaged retirement account, but in this case, you make deposits before you pay taxes on the money. Unlike a Roth, though, you pay income taxes on the money you withdraw, and you have to start taking money out at least after you hit age 72. Depending on your circumstances now or what you imagine they’ll be in the future, this could be a good option for millennials saving for retirement. 


Woman with a calculator budgeting.

Put away a little extra each month in an HSA

Even if you’re busy paying off student loan debt or covering the costs of your mortgage and you can’t imagine being able to save 15% of your income for retirement right now, that’s okay. Try to put away a little extra from each paycheck into a health savings account if you qualify by having a high-deductible health plan. This tax-advantaged account can be used now for medical expenses, or you can take advantage of extra savings possibilities if you’ve already maxed out your annual Roth IRA contributions. Even if it’s $20 or $100 more each month, you have the advantage of time on your side. Every dollar you save can help pay medical costs in retirement too. 


When you need those long-term savings accounts, it makes sense to go with a community credit union you trust. As an RMCU member, it’s easy to open an account online. And if you’re not a member, you can also apply from the comfort of your computer or go to your nearest branch. Sign up, and start saving. 

Non RMCU links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Rocky Mountain Credit Union of any of the products, services or opinions of the corporation or organization or individual. RMCU bears no responsibility for the accuracy, legality, or content of the external sites.

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