The 6 Keys to Successful Retirement Planning for Millennials

Lauren has interviewed by Casey Bond about a variety of personal finance topics over the last 6 years. For this particular article Lauren provided some of her best tips for millennials planning for retirement.

Avoid Lifestyle Inflation

One of the best things you can do while you’re young is avoid lifestyle inflation, according to Lauren Anastasio, director of financial advice at Stash. That’s when you allow your lifestyle to become more expensive as you earn more during your career. “It’s a common phenomenon to go from living with roommates to having your own place once you start making your money, or trading in your modest car to lease a new luxury vehicle,” she explained.

So how do you combat it? A good rule of thumb, Anastasio said, is to target saving at least 50% of each pay increase you receive during your career.

Prioritize Tax-Advantaged Accounts

As you’re saving and planning for retirement, Anastasio said to be sure you’re not overlooking your tax-efficient account options. “Leveraging 401(k)s, IRAs and HSAs, when available, will be hugely impactful when growing your savings over time,” she said.

That’s because the gains you earn on investments are usually taxable. However, putting your money in tax-efficient accounts allows it to grow without paying taxes each year. Whenever possible, try to max out these options before investing in taxable brokerage accounts.