How millennials should plan for retirement

Balancing Retirement with Student Loans

by Paige Estigarribia


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For many millennials, once college graduation is over, paying bills, saving for retirement, and paying off student loans become primary financial concerns. How can a millennial begin to focus on retirement while paying off student loans and managing day-to-day bills? To give us some tips, we reached out to Katie Gampietro Burke, CFP®, CDFA®, ChFC® at Wealth by Empowerment. Here's what she had to say:

Q: When should millennials begin thinking about their retirement options?

Ms. Burke: They should consider a Roth IRA option as soon as possible when they are teenagers and have a job. Once they have a job, I would like them to contribute up to their match, save $1000 as emergency savings, and then pay their debt down.

Q: When planning for retirement, what different lifestyle and life events should millennials consider?

Ms. Burke: I believe the maximum age millennials should feel comfortable staying with parents is around 33. Life events such as marriage, buying a car, and buying a house are not as important as paying down student loan debt. With that said, I find buying a car more of a priority than marriage or buying a house.

Q: And what about student loans? How should a millennial with student loans balance saving for retirement and loan repayment?

Ms. Burke: That's a great question. They should pay student loan debt down after they contribute to their retirement plan match and have emergency savings.

Q: Are there different tools that millennials can use to help them figure out how much to save for retirement?

Ms. Burke: There are many different tools that track cash flow (what you have, what you owe, and your net worth). You have to be careful of who sells your information. I'd like to see my clients pull their annual credit report once a year from AnnualCreditReport.com, but then again, I like them to freeze their credit, which is $10 per bureau if his/her ID has not been stolen. Like I mentioned above, taking care of the match, the emergency savings, and any debt is very important, but so is saving for retirement. 20% to 25% is what I recommend (gross).

Expert Interview: Pay Off Your Student Loan Debt Early or Invest?

Q: Are there any common mistakes that many millennials make when they start thinking about retirement planning?

Ms. Burke: Unfortunately, there are many mistakes people make. Their credit is not good, they're not taking advantage of the match, they have too much consumer debt, their student loan debt is high, and they have nothing saved for a rainy day. Financial planning is not just for people who have millions and millions of dollars. Financial planning is for everyone. All people need to understand their employee benefits and much more.

Reviewed August 2017


Katie Gampietro Burke, CFP®, CDFA®, ChFC®, is a Financial Planner at Wealth by Empowerment. Find her on Facebook, Twitter, and LinkedIn.

Paige Estigarribia is a writer for The Dollar Stretcher who enjoys writing about food, frugal living, and money-saving tips. Visit Paige on Google+.

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