I wrote this article on May 17th, 2012 for my Golden Valley Patch Blog.
Much has been written about the huge amount of college tuition debt that this spring’s college graduates take with them into the business world. College debt is especially important to the recent graduates of all the great colleges we have in Minnesota.
I think that as much, or more, needs to be written about what a great opportunity this year’s college graduates have to begin saving for their retirement. Now is a great time for college graduates to not repeat the same retirement plan savings mistakes that many of their parents have made in the past and continue to make now.
The biggest advantage the college graduates have going for them now is time. College graduates should begin to save for retirement through their company retirement plan account as soon as they find their first job.
Even before they buy their first car, or first house or condo, this spring’s college graduates need to maximize their contributions to their company retirement plan account. Put in to your company retirement plan account as much money in order to qualify for the maximum matching contribution from your new company.
For every dollar you contribute to a company retirement plan account, your company retirement plan sponsor matches that dollar amount up to a certain level. You have a 100% annual investment return just waiting for you to take advantage of!
First, put enough money away in your company 401(k) plan in order to qualify for the free company-matching contributions. You can figure out “what to buy” with those company retirement plan investment funds later on.
Every one of the college kids that I have talked to never took a personal finances course in high school or college. But you don’t need that background in order to make the decision to participate 100% in your first company retirement plan account.
Ric Lager
Lager & Company, Inc.
