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Posted September 30, 2016 by

5 simple strategies for recent college grads struggling to save for retirement

save money words on a chalkboard illustrating back to school savings or instructions on how to save on your education costs

Save money now, reap the rewards later. Photo courtesy of Shutterstock.

We get it. You just graduated from college, and landed that first job. It’s an exciting time.

It’s also expensive.

You have your own apartment now, but rent is a lot higher when not living in that college town, or with fewer roommates to split the costs. Then there is that car payment and car insurance. And you are now paying for health insurance on your own for the first time. Wow, that is expensive, right? Suddenly, that salary you didn’t negotiate suddenly looks a lot smaller after taxes and deductions are taken out.

And let’s not forget those dreaded student loans you are starting to pay back. Those are a real drain, literally and figuratively. Did you borrow money from mom and dad? It might be time to pay them back too. It’s tough. And now that you finally have a job and are making some money, you want to have some fun and spend a little extra, go on a vacation, or splurge on yourself.

Save for retirement? Not now. There’s plenty of time, right? Yes, there is. But trust us, it’s never too soon for recent college grads and Millennials to focus on retirement. That may be the last thing an early-to-mid 20-something is thinking about, especially with so many other expenses.

But…follow the wise advice of professionals.

“With student loan debt and health care costs, many recent college graduates may think they need to defer or limit the amount they save for retirement until they have more money to put towards their retirement savings,” says Joe DeSilva, Senior Vice President/General Manager, ADP Retirement Services.

ADP’s annual study on retirement savings trends shows that employees age 20-24 defer an average of 4.6 percent of their pay into a tax qualified retirement plan, while employees age 55 and older defer an average of 8.5 percent. Yet, the cost of waiting does not add up. Recent graduates should instead start saving as early as possible – even if it is just a small portion of income.

“Being proactive today can reap big rewards tomorrow,” says DeSilva.

Below are four steps recent college graduates can take today to set themselves up for the retirement they want tomorrow:

1. Don’t wait to save until all your college loans are paid off: Save now to take advantage of compound earnings. If you wait even 10 years to start contributing to a retirement plan, you could miss out on many thousands of dollars in retirement savings.

2. Actively plan your retirement: Even if a retirement plan is offered by your employer, only you can take charge of your future financial security. Ask your Human Resources department for help in deciphering your benefit options.

3. Maximize your savings early in your career: Choose to have your employer automatically increase your retirement plan contribution every year.

4. Establish good money management habits: Focus on saving, smart budgeting and planning for emergencies. In other words, live only within your means.

While a recent college graduate isn’t likely to accept or move on from a job based on the retirement plan of the employee, it’s best to find an employer who at least offers a company match. That can help motivate recent college grads to start saving because it’s an easy way to start building your retirement base.

“While they may have many decades before retirement, Millennials can benefit from employers who guide them in making smart retirement savings choices now, at the beginning of their careers,” says DeSilva.

It’s never too early to start saving for retirement, even for recent college grads, entry-level employees and Millennials at all stages of their professional career.

Want to learn more about how to save money for retirement while managing the start of your professional career? Then stay connected to College Recruiter by visiting our blog, and connect with us on LinkedInTwitterFacebook, and YouTube.

Joe DeSilva, Senior Vice President/General Manager, ADP Retirement Services.

Joe DeSilva, Senior Vice President/General Manager, ADP Retirement Services.

About Joe DeSilva
Joe DeSilva is Senior Vice President and General Manager of ADP’s Retirement Services business unit, which serves a national client base of small, medium and Fortune 500 businesses. He is responsible for setting the strategy and overseeing the day-to-day operations of the business, which includes Sales, Marketing, Product, Development, Service and Operations functions.

The views expressed herein are those of the author, are intended for general information only and are not intended to provide investment, financial, tax or legal advice or a recommendation for any particular situation or plan.  ADP, LLC and its affiliates (ADP) do not endorse or recommend specific investment companies or products, financial advisors or service providers; engage or compensate any financial advisors to provide advice to plans or participants; offer financial, investment, tax or legal advice or management services; or serve in a fiduciary capacity with respect to retirement plans.  Nothing herein is intended to be, nor should be construed as, advice or a recommendation for a particular situation or plan.  Please consult with your own advisors for such advice.

 

Posted June 18, 2016 by

5 insurance facts for recent grads

Photo by StockUnlimited.com

Photo by StockUnlimited.com

When an individual is starting their career, it’s important to realize that life will throw many unexpected events on their way. This is something that happens to everyone. Having the right insurance can make getting past a difficult situation a lot easier. Financial experts agree there are a variety of insurance options available. There are also some types of insurance that are considered essential for dealing with unexpected things that can occur at any age.

1.    Individual Situation

It can be a challenge for a person starting a career to know what insurance they should purchase. Purchasing the right kinds of insurance should be determined by a person’s individual situation. A number of factors will determine this. It will involve employment benefits, age, lifestyle, and more. There are four different types of insurance experts recommend everyone have. They are health insurance, life insurance, long-term, and short-term disability insurance as well as homeowners/renters insurance.

2.    Health Insurance

In many cases, people starting a career could be just one serious illness away from disaster. According to a study done by Harvard University, 62 percent of all bankruptcies in the United States were a result of health related issues. Over 75 percent had some form of medical insurance. If a person has health insurance through their employer, they may want to consider the best plan offered. The key to getting the best possible health insurance is for a person to do research and know all of their options. Sometimes the least expensive health insurance is not always the best deal. Even with rising high co-payments and deductibles, health insurance is still something people must have. A minimal health insurance policy is still better than not having any type coverage.

3.    Life Insurance

According to an article in US News, people don’t often think of purchasing life insurance until after they’re married and have children. The reality is a younger person will be able to purchase a life insurance policy at a very low rate. This policy will grow in value over time. These types of life insurance policies can be adjusted as a person gets married and has children. This is the time when a person’s death could cause a financial burden to those who depend on them. If a person is unmarried and does not have children, it is also important they purchase life insurance. There is a good chance they will leave behind debts such as student loans, credit card bills, auto loans that must be paid. Without life insurance, these debts will become the responsibility of family members.

4.    Disability Insurance

This is the type of insurance people starting a career believe they may not need. Nobody who becomes injured or disabled on the job believed it would happen to them. According to statistics from the Social Security Administration (SSA) approximately 30 percent of individuals entering the workforce eventually become disabled. These are disabilities that make it impossible for a person to work until their retirement age. Workers with the best health insurance, generous savings, and good life insurance are not completely prepared to become disabled. Health insurance will cover medical bills and hospitalization. It’s common for employers to provide their employees with both short-term and long-term disability insurance coverage. If a person is an independent contractor or owns their own business, they can get this type of coverage from a private insurer.

5.    Homeowners/Renters Insurance


When a person is starting their career, they may need to rent a place to live. There are some leases that require a person to have renters insurance. This type of insurance will cover a person coming into a rental unit and getting injured. It can also cover a person’s things that might be stolen. Should a renter make a mistake and cause damage to the rental unit, this type of insurance may cover the damage. Should a person own a home and have a mortgage, the lender will probably require them to purchase and maintain homeowners insurance. In many cases, failure to pay a premium may be reported to the lender. Homeowners insurance is designed to cover the destruction of a structure, its contents. It can also protect a homeowner if someone is injured on their property and much more.

Michael Rogers, guest writer

Michael Rogers, Operations Director of US Insurance Agents

Do you need help making other major life decisions as a recent grad? Keep reading our blog for more tips and follow us on LinkedIn, Facebook, Twitter, and YouTube.

 Michael Rogers is the Operations Director of USInsuranceAgents.com. With over five years of experience and knowledge in the insurance industry, Michael contributes his level of expertise as a leader and an agent to educate and secure coverage for thousands of clients.

 

Posted July 29, 2015 by

Health Insurance Options for College Graduates

Brandon Cruz

Brandon Cruz, President of GoHealth Insurance

Graduating from college is an exciting time that is full of new experiences. While embarking on the post-college journey, it’s important for new graduates to consider how they intend to obtain health insurance. The good news is that today’s young adults may have more options than in the past. Consider six different ways for college graduates to get covered. (more…)

Posted March 30, 2015 by

Leaving the Nest: 3 Tips for a Smooth Transition

Woman labeling moving box at home

Woman labeling moving box at home. Photo courtesy of Shutterstock.

As graduation day and taking on your first real job get closer, the realities of true adulthood and independence begin to show themselves. This may feel like a scary time, but like most young adults, you’ll simply learn how to handle situations as they come. But to get you started, these three tips will help manage some of the more pressing issues. (more…)

Posted August 18, 2014 by

Pursuing MS in Germany: Universities and Application Procedure

Swati Srivastava

Swati Srivastava

Germany is renowned all over the world for its quality education system and not simply in engineering. Almost two and half million students all over the country end up applying for MS programs in German University; read the following post to know more about pursuing MS in Germany.

Germany being one of the reputed industrial countries in Europe, has the status of achieving great technological progress amongst the other countries of the world and has been well known for playing a significant role for economic development in the western hemisphere. (more…)

Posted July 29, 2014 by

Tips to negotiate your first job offer without fear and anxiety

Job interview with candidate for office employment or negotiation for hiring

Job interview with candidate for office employment or negotiation for hiring. Photo courtesy of Shutterstock.

Negotiating is tough at the best of times, but when it’s your first job offer it’s even harder. It’s tempting not to negotiate at all, but this won’t get you anywhere! After all, it’s better to ask and get turned down than to not even try at all. One of the hardest things to conquer is the feelings of fear and anxiety you’ll inevitably face. Here are our tips on how to avoid them becoming an issue. (more…)

Posted January 10, 2014 by

Don’t Tune Out the Health Care Debate

A health insurance policy with a pen for signing the papers

A health insurance policy with a pen for signing the papers. Photo courtesy of Shutterstock.

During the past six months, health insurance has earned a dismal political reputation because of the firestorm over the Affordable Care Act. But regardless of how polarizing the discussion has become, you should pay attention to it. As a college student or recent graduate, your role and responsibility regarding health insurance could soon change, and you could find yourself facing some important decisions.

Health insurance, or lack of it, can profoundly influence your well-being – physically and financially. No matter what side of the debate you fall on, you’ll need to make some choices in 2014. We’ve winnowed the process down to three steps to help you: (more…)

Posted September 20, 2013 by

Trying to Get Health Insurance for Your Entry Level Job as an Entrepreneur? One Possible Answer

If you are going to have an entry level job as an entrepreneur, it is a smart idea to get some health insurance.  The following post offers a new source that may be helpful.

With ObamaCare’s new health insurance exchanges debuting this October, you might have questions about what kind of plan to buy—especially if you’re an entrepreneur, small business owner or freelancer. In fact, you might be wondering whether you’ll be able to afford health insurance at all. To help

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Posted June 14, 2013 by

Don’t Have Immediate Health Care Coverage on Those Recent College Graduate Jobs? What You Can Do

Some recent college graduate jobs may not offer health care coverage right away.  However, you do have some options, according to the following post.

If you’ve taken a new job recently, you might be on the losing end of a 90-day waiting period before your health care benefits take effect. Did you know that that waiting period is a federally-mandated minimum? Ninety days is the maximum waiting period that companies can take before providing benefits to new employees. Not

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What to Do When Health Care Doesn’t Kick In Immediately at Your New Job

Posted June 05, 2013 by

Colleges with the Best Natural Landscapes Nearby

Picture of Yellowstone National Park

Picture of Yellowstone National Park. Photo courtesy of Shutterstock.

The American landscape is full of rich natural beauty and studying in one of these lush landscapes can be a life-changing opportunity. If you love spending time outdoors hiking, biking, kayaking or camping, consider adding these truly awe-inspiring landscapes to your bucket list when planning to study in America. (more…)