Tips for Millennials to Jump-Start Retirement

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Discussions about the “millennial” generation can elicit a range of responses. Some view those born between 1980 and 2000 as energetic go-getters who pursue the causes they believe in and embody the entrepreneurial spirit, while others only see over-opinionated yet lethargic teenagers with inflated senses of entitlement. Every generation has experienced their own brand of social, cultural, and economic variation, but the rise of technology and connectivity appears to have affected the mid-20s/early-30s crowd in unprecedented ways.

With the bulk of their focus on the here and now, millennials may not be giving retirement an appropriate level of attention. Many view retirement as an abstract concept that they’ll worry about eventually; they would rather have their full paychecks and live in the moment. For the forward-thinkers, ideas and methods may not be as strong or comprehensive as they could be.

Below are some basic concepts that can help millennials start on the path to retirement or reinforce their ongoing strategies.

Know the Different Retirement Account Types

Millennials may not understand the 401(k) or pension plans their employers offer. They also may not realize that other retirement options exist. While typical employee plans are invested in publicly traded securities and managed by third parties, IRA custodians like New Direction Trust Company offer accounts that target self-directed investors. A Roth or Traditional IRA will bear unique tax advantages and may allow portfolio diversification through alternative assets. Once millennials understand their true spectrum of alternative investment options, they can approach retirement in ways that better suit their personalities (passive vs. hands-on, high-risk vs. low-risk, etc.).

Contribute as Much as Possible

Saving money is great, but putting it to work is even better. Every retirement plan has a maximum contribution limit, and meeting that limit (or, at a minimum, contributing as much as one may be comfortable with) can boost an IRA's earning potential in ways that savings accounts can't match. Each retirement account type has a different contribution limit, and the tax benefit associated with contributed funds will depend on the holder's plan type and your income.

Don’t be Afraid to Seek Professional Help

In considering the aforementioned factors, a financial professional can help millennials better understand their financial goals. Hiring a financial advisor or certified public accountant (CPA) may seem like another expense or an undue hassle, but optimizing an investment strategy can help offset those costs. Most people don’t consider the full scope of assets, debt, income, and expenses within their financial lives, so a competent and accredited professional can help paint a more complete picture.

In Self-Direction, You Can Never do Enough Research

Self-directed investing allows you to incorporate existing knowledge into a retirement plan. However, like all investments, these assets involve varying levels of risk, so due diligence is always recommended. Prior knowledge can always be built upon, and it’s never too late to learn about a new and potentially lucrative investment initiative.

Take Advantage of Evolving Markets by Starting Small

Technological platforms are providing new avenues for experimenting in alternative asset investing. Websites that allow equity crowdfunding and fractional debt investments are becoming commonplace. Many of these websites attract non-accredited investors and only require small minimum investments, all while providing glimpses into the real estate and private equity markets. Per the Internal Revenue Code, these investments are perfectly allowable in retirement plans.

Tech-savvy millennials have broader access to resources than any generation before them, so now may be the time to consider new retirement strategies. New Direction Trust Company specializes in self-directed retirement with alternative assets, and we’d be happy to contribute to your education process. Please don’t hesitate to call us at 877-742-1270 or send us an e-mail at with any questions you have about getting started.