With school loans and possibly credit card debt to pay off, putting aside some of your first paychecks for retirement may seem a little premature. But at this point in your life, you enjoy a priceless advantage: time for assets to grow. Those extra years that your retirement plan contributions could be compounding are the greatest reason to start saving for retirement right away.

Save Now

Smaller qualified retirement plan contributions made earlier in your career may actually end up being worth far more than larger contributions made later in life in an attempt to catch up, due to the power of compounding interest over time. Get in the habit early of saving something each month.

An automatic savings plan – either one you enroll in at work or one you create yourself – provides a disciplined way to save, and you may well find that you won’t miss the money. A good rule of thumb is to save at least 10% of your household income each year.

Employer Benefits Matter

When weighing job offers, be sure to consider an employer's retirement plan. Look for a plan with many investment options that also matches a portion of your contributions. If your employer does not offer a retirement plan, you can start one of your own by using an IRA or an annuity.

Consider getting professional advice in how to diversify your retirement savings. If your employer offers company stock as an investment choice in their plan, be sure to balance this choice within your total asset allocation – as you would any other  investment. Don’t let a possible incentive on company stock prompt you to overweight this in your portfolio.

Your Retirement Is In Your Hands

Even if you are enrolled in an employer plan, you and/or your spouse may be able to open additional qualified retirement accounts, such as IRAs. And if you run a business on the side, this income may qualify for a separate retirement account.