Future Healthy: Hey millennials, retirement planning is important to you, too!

When I was in my 20s, all I cared about was making more money so I could spend it on travel, books and CDs (this was all pre-digital music downloads and streaming). Now that I'm little bit older and (supposedly) wiser, I realize that taking care of my future is equally as important.

It doesn't matter if you intend on working for the rest of your life or retiring early, planning is crucial. Sure, you may be up to your eyeballs in student loan debt, but that doesn't mean you can't overcome them with a little help.

Young people have the power of compound interest in our favor. To put it in a nutshell, money you put into an investment will earn interest. That interest will then help you earn even more interest.

Even if you save as little as $1,000 in an account that earns you 5% interest, that money would magically turn into another $1,000 within 10 years. You don't have to lift a finger.

If you want to be able to live comfortably, you need to think about how you can set aside money for retirement. It's still far off, but you don't want to regret not saving money sooner when you're in your 60s with potentially sky-high medical bills. So for all you millennials, here are some ways you can start setting aside money now, so you don't miss out down the line.

Take advantage of employer programs

We're talking about free money, folks. Who doesn't want to take advantage of that? Your employer may have what's known as a 401(k) account, which is essentially a retirement account where you can put in pre-tax dollars. If you're lucky, your employer will match your contribution, sometimes as high as 6% of your paycheck.

Some employers match up to a certain dollar amount instead of a percentage. Still, that's a pretty good deal. Since your contributions are coming out of your paycheck alongside other deductions (such as taxes and Social Security contributions), you're probably not going to miss that money.

If you're afraid you can't afford to contribute any money to your 401(k), think about how much money you're leaving on the table. Let's say your salary is $40,000 and your employer will contribute up to 6%. That's $2,400. If you contributed $1,000, you're leaving $1,400 behind. In 10 years that amount would become $2,306.

Live like you're still in college

Just because you make more money doesn't mean you need to spend more. While it's tempting to buy a nicer car or fancier clothes, paying off your student loan debt is more important. I mean, what would you rather do, pay thousands of dollars in interest, or take the money you would've spent on student loan interest and put it into something more exciting?

It's okay to continue living with roommates, pack a lunch for work, or go out less if it means you can save a bit of cash. Adulting sucks, but it sucks even more when you don't have enough money for life's necessities when you're older.

The best way to understand how to juggle paying off debt, save money and set aside money for retirement is to track your expenses. Yes, that means keeping track of every single dollar that goes in and out. You'll then find it easier to figure out areas where you can continue to cut back as your debt payoff moves forward.

One bonus is that when you're debt-free, you can put the money you would've paid to bump up your retirement savings, either in a 401(k) or an IRA.

Give your HSA some love

If you qualify for an account, you should absolutely open one. It'll not only help you save money on your health expenses, but it can act as a retirement account of sorts.

First, let's tackle the health care part. You get to contribute tax-free dollars into an HSA and let it compound. The money in that account can be used for any qualified health expenses. The cool thing is that you don't need to have that money immediately reimbursed, meaning that you can leave the money there and withdraw it only when you need it, like when you're retired.

An HSA can also act like a traditional IRA in that you can take money out for any purpose without being charged penalties once you're 65. (We don't advise spending this money on non-medical expenses prior to 65 -- too many penalties!) Your money grows tax-deferred, and after 65 you'll only pay taxes on the amount you take out.

All this to say, think of this account as a killing two birds with one stone: it's both a way to help you save on medical expenses and set aside even more money for retirement. And if you're extra lucky, your employer may contribute to your HSA, as well.

Retirement may be a ways off, but it's never too early to start planning for it. Take it from many people in their 40s and 50s - they wish they had started earlier.


Whether it's for covering medical expenses, or planning bigger investments, our Future Healthy column will help support your path to retirement, no matter where you are on the journey. And for the latest info about your health and financial wellness, be sure to check out our HSA Learning Center, and follow us on Facebook and Twitter.

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