Put Money Toward an ‘Opportunity Fund’
Opportunity funds are funds that allow you to invest into opportunities without digging into your savings and without having to budget even more aggressively for a period of time in order to make room for the investment.
It’s basically a ‘just in case’ fund for that golden opportunity that you simply can’t miss. The stock market is ever-changing and you might want to take advantage of that. Or, perhaps, there’s a local business that you want to invest in. What about a start-up?
When these opportunities arise you don’t want to be caught unprepared- and we guarantee you, if you’re between 23 and 38, there will be many opportunities that you can take advantage of over the years.
Contribute the Full Match Amount to Your 401(K) and Look Into a Roth Ira
Few savings opportunities can set you up for a comfortable retirement as easily as 401(k) accounts. The days of widespread pension programs are long gone, so Millennials, much like other generations, have to make the best of the programs that they can access.
If your employer offers 401(k)s, then the best thing you can do is contribute the full amount in order to take advantage of employer contributions. If that sounds like a lot of money then just think how much this could help you once you retire!
Opening a Roth IRA is equally important. If you’re in a lower income bracket now but expect to move up, then contributions to a Roth IRA are crucial very early on. That’s because you’ll be paying taxes on your contributions now, allowing you to take advantage of a tax-free stream of income later on in life, maximizing your Social Security when you retire.
