Opening a retirement account in your 30s might be a distant thought. Hey–even the weekend can sometimes feel a lifetime away.
But between focusing on your career and juggling your personal life, we can see where savings might slip through the cracks. That's why at Finhabits we’ve simplified the process to open an Individual Retirement Account (IRA) in the event that your job doesn’t offer a good plan, or that you might think you can't afford it.
Below, three hacks to get your IRA started on a fruitful journey.
Hack 1 – Make Compound Interest Your Pal ASAP
We all have a good ol’ pal named compound interest. Think of it this way: if you were to open an IRA today with $2,000 and not add another single penny to it – in 30 years that will have turned into about $17,500.* But how? Over time, your IRA will make you money, and your earnings will be reinvested to make gains from the same gains. That said, it's important to get an IRA started ASAP!
Hack 2 –Challenge Your Fambam
As cliché as it may sound, you’d be surprised at how effective it can be to have a retirement savings buddy. Like going to the gym, sometimes you just need that extra support to keep it fun. How does the challenge work? You and your friends or family can start contributing small amounts –let’s say about $5 per week, then challenge each other to increase by $1 every week for one year. Who will be the first one to give up?
Hack 3 – Remove All Temptations
We only mean that in the sense that if you don’t see money in your bank account, then you won’t feel the urge to spend it. So to save you from spending your goods, we suggest you schedule automatic contributions to be made to your IRA as soon as your paycheck enters your bank account. This will simultaneously block off any thought of you even touching that money.
Like any other financial habit, getting started with an IRA is often the most difficult step for people in their thirties, which is why Finhabits makes it easy to get started and it only takes a few minutes. Think about it, what could be more beneficial for your future than prepping for it starting today?
Finhabits explains Small Habits, Big Savings: 3 Easy Changes to Kickstart Your Investing Journey
*These examples are for illustrative purposes only and do not mean to provide any investment recommendations or advice. The $17,500 balance after 30 years was calculated using a 7.5% Annual Investment Return for a Roth IRA.