Financial Milestones You Should Be Starting In Your Early 20s

Retirement

It may be more than a few decades off, but that's actually a good reason to start now, as the power of compound earnings is on your side. Compound earnings in a retirement account become so valuable over time because each year, as the account gets bigger from contributions and market gains, you get earnings on top of previous earnings. This is so powerful, as Business Insider notes, that someone who invests five thousand dollars annually between age twenty-five and sixty-five (200,000 dollars total) ends up with over one million dollars.

Many employers offer 401(K) plans with a company match. If available, these are the best options for starting retirement savings. The company match is like free money, and it can build, along with the rest of your savings, tax-free. Individuals without access to an employer-sponsored plan can sign up for an IRA account, which allows them to invest in a whole host of investment products with tax-free contributions of up to five thousand dollars per year.

Come on, get saving in your early 20s!