3 Tips to Create a Millennial Retirement Guide

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Anytime I talk to millennials, the farthest thing from their minds financially is saving for retirement. Most of them are calculating how to pay down debt while also still being able to afford their monthly Uber, Amazon or Netflix charges. The logic of putting money into a retirement account that you can't touch for 50 years versus paying off current living expenses is a tough notion to get your head around, especially if you are earning an entry-level salary.

For starters, don't set yourself up to live from paycheck to paycheck. Get a job before an apartment and make sure the rent and utilities don't exceed 30 percent of your after tax income. If not, you'll keep digging yourself into a financial hole. Paying for more than you can truly afford will have you feeling anxious, guilty and overworked. Of course, it's a dream to be living in a spacious one-bedroom apartment in Greenwich Village. Except that apartment will come with a $2,500 price tag and be located on the top floor of a five-floor walk-up. Living on your own in New York City after four years dealing with roommates sounds like heaven. Except unless you're in investment banking or a tech developer it'll be nearly impossible to make that happen. Unless you have no other expenses and are happy only eating 99 cent pizza and cup of soup for meals. Get a roommate and live in a less expensive area of your city. Isn't it better to have roommates now while you are just starting out rather than in your 40s and 50s?

Don't Ignore Retirement: Most millennials tend to look the other way when it comes to retirement. As a generation, they've succeeded in pushing the clock back ... temporarily. They are making high-level purchases later on like buying cars and homes. They are also getting married at older ages and having kids much later in life than former generations. The biggest life milestone millennials are pushing back is setting up a retirement nest egg. Millennials are spending beyond their means and are living paycheck to paycheck more frequently than any other generation. According to the Bank of America/USA Today Better Money Habits Report, more than half of them live paycheck to paycheck.

Make a Plan and be Accountable: There is no denying that millennials are in a worse financial state than their parents. A shaky economy, diminishing Social Security rates, lack of job security and decreasing 401K match programs all negatively affect a millennial's retirement platform. Long gone are the days when loyal employees spent forty years at a single company and received a pension as a reward for good behavior. The pension is no longer a viable option for retirement unless you work for the city government. Professionals are jumping from company to company, gaining new skills, responsibilities and often a higher salary.

Understand the ABC's of 401(k)s. The first thing you need to ask, "Does my company have a 401(k) program and do they match it?" If it does, lucky you! You better sign up quick for both -- especially if they match. You'll be throwing away free money if you don't. That's like winning the lottery but never collecting your check. Of those surveyed, 43% have contributed to a 401(k) program, according to the Better Money Habits Report. If your company doesn't have a retirement plan in place, sign up for an IRA or Roth IRA. How do they differ? With an IRA, you will be taxed once you withdraw the funds when you retire. A Roth IRA will be taxed as soon as you open an account (and each time you contribute). The highest amount you can put in annually is $5,500. Go to your local bank and set up an account this week. Don't let it slide. Jump start 2015 by opening an account up today. Even if you think you can only put in a few hundred dollars yearly -- it'll still be more than zero. It'll also help you set up a pattern to save and hopefully budget out more cash for next year's contribution.

You might be thinking that this all sounds great, but you just don't have the extra dollars to make saving for retirement a current reality. Don't make excuses -- you are only sabotaging yourself. Think of your weekly guilty pleasures: the Venti Latte or the second glass of wine with dinner. There are items you can weed out or thin down. Downsize your Starbucks coffee order to a $1.75 tall brew coffee from a $3.45 latte and you'll save $621.25 a year. If you removed your daily coffee habit altogether you could save $1,239.25. Instead of spending your salary on designer shoes, pricey restaurants or high rent -- invest in yourself and put money towards your financial future. Stop living with financial regret.
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