4 Ways For Millennials to Get Ahead in Retirement Savings

Early in your career, you're likely focused on many financial priorities unrelated to retirement. But getting an early start on retirement savings can make a big difference in your financial comfort down the road.

Traditional retirement savings might not be ideal if you're a millennial, though, given the difficult financial issues of underemployment and record levels of student debt. That said, there are ways you can get a head start while balancing a modest income and necessary expenses. Here are four to consider.

1 Find creative ways to curb spending

No matter your goals, getting your finances in order requires you to examine your spending habits. Luckily, finding ways to save money where you normally spend can challenge your imagination. If you like to travel, instead of spending money on airfare and accommodations to visit a new state or country, explore a neighborhood in your city that you typically don't frequent. If you're dining out often to enjoy exotic cuisine, try cooking meals at home using new recipes. These changes won't significantly impact your quality of life, but they can provide you with some extra cash to put aside for retirement savings.

2 Prepare funds for the unexpected

Life is unpredictable, so setting aside money in an emergency fund can be a useful way to prepare for financial curveballs. Having liquid funds to use for emergencies or rainy days can prevent you from getting off track financially when life gets complicated. Short- or medium-term funds are also useful for things like college expenses and weddings. Instead of using a high-interest credit card when you're confronted with these types of costs, you can use the funds in your savings account to help protect yourself from falling into debt. If you already have some high-interest credit card debt, consider applying for a balance transfer to a new card with a lower rate. This will help you make progress on paying down the principal debt without the pressure of accumulating a lot of interest.

3 Make a personalized retirement plan

Everyone's financial situation is unique, and there's no one-size-fits-all solution for your retirement savings. Commit to researching and learning about as many options as you can before settling on a retirement plan that works best for you. Start with a retirement savings calculator to help you envision your future and make a plan. And make sure you're taking advantage of your employer's 401(k) match if it's available. Research shows that millennials are slower than other generations to invest in this type of retirement option, and it's essentially free money.

4 Balance paying off loans with investing

If you're a millennial with student loan debt, you're likely trying to decide whether to pay off debt or put aside savings. Fortunately, there are some ways you can prioritize. You can compare your loan interest rates with the rate of returns on your investments. If you've invested in a 401(k) through your employer and are earning around 10% per year in returns, you might want to contribute to a retirement account early instead of prioritizing paying down lower-interest student loans. Contributing to a retirement account early in your career can give your investments plenty of time to grow through the power of compound interest. As for your loans, if you have a strong credit score you may be able to restructure them so you're making the same payment but paying the loan off more quickly.

The bottom line

You face plenty of unique challenges as a millennial—but also plenty of opportunities. It's never to early to start saving for the day when you'll no longer work. And by using these strategies, you're putting yourself in a solid position to retire on your terms.