For teenagers, retirement may seem like a lifetime away, but it’s never too early to start saving for the future.

6 Steps to Help Teens Plan Financially for the Future

(Family Features) For teenagers, retirement may seem like a lifetime away, but it’s never too early to start saving for the future. Because financial habits can be created at a young age, the sooner kids begin to save and learn about investing, the less likely they’ll face worries about money when they eventually stop working.

Teens are already thinking about retirement, according to the Achievement Teens & Retirement Survey conducted by Wakefield Research on behalf of Junior Achievement and MissionSquare Retirement’s Foundation. Among young adults ages 13-18 surveyed, 83% have thought about their retirement and 78% believe they’ll be able to retire comfortably when the time comes. However, only 60% view retirement as living on investments and savings after leaving work, believing instead retirement could mean taking extended time off for travel, study, illness or taking care of family matters.

“This research shows retirement is more top-of-mind for teens than one might think,” said Tim Greinert, president of Junior Achievement USA. “While young people have given retirement planning some thought, it’s apparent they still need information on the best way to go about it.”

Because nearly half of U.S. households (46%) report having nothing saved for retirement, according to the Survey of Consumer Finances, taking steps early to save and invest can help teens get a head start on achieving a successful retirement.

1. Start now. The sooner you start, the longer you have to save and for investments to grow. Even though contributions may be small during your teens and 20s, it can make a dramatic difference in the long run.
    
2. Pay yourself first. Whether through a dedicated savings account or an employer’s retirement plan, set aside a set percentage of each paycheck. Then prioritize spending on what you truly need and want.
    
3. Invest what you save. Unless you save a lot, you’ll need to make the most of your savings by investing them to help them increase in value. According to the survey, teens believed investing in stocks and bonds with the help of a financial advisor (45%) or researched online (38%), buying real estate or property (30%) and buying cryptocurrency or non-fungible tokens (15%) are among the best ways to save for retirement.
    
4. Find the right balance between investment risk and potential return. The ideal mix is one most likely to help meet investment goals with a level of risk you can handle. The longer you have to invest, the more risk you can likely take.
    
5. Spread savings across different types of investments. This helps you manage risk. As some investments go through rough stretches, others are likely to hold steady or grow.
    
6. Stick with your investing plan. Avoid making decisions based on emotions or in an attempt to time the ups and downs of the market. Focus instead on meeting goals over time.

“The fact that so many young adults in the early stages of their careers are aware of a variety of investment strategies is encouraging news,” said Deanna Santana, president, MissionSquare Foundation. “Over the course of our lifetimes, investment approaches, the economy and our priorities will change, so planning for life after work is an ongoing necessity – for teens and adults alike.”

Find more advice to plan for the future and achieve economic success at ja.org and missionsq.org.

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