The 19 Best Things Millennials Can Do Now for Retirement

The decades are going to fly by, so you need to have enough saved when your golden years roll around.
Updated April 3, 2023
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Millennials are the largest generation in the workforce now. The oldest millennials are in mid-career at age 41. The youngest millennials are in their first few years of working or fresh out of graduate school at age 26.

This puts them in the interesting position of having decades to go before retirement is possible, while also facing a changing and precarious economic landscape (and maybe even having to prepare for a recession).

Regardless of what happens with the economy, there are some things millennials can do now to set themselves up for a healthy retirement. Following are 19 steps millennials should take today.

Start now

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The sooner you start to save, the more you’ll end up with in retirement. If necessary, work more and cut your living expenses so you have an extra $10 or $25 to save each week. The longer you wait to start, the harder saving enough to retire will be.

Create an emergency fund

New Africa/Adobe Woman hiding dollar banknotes under mattress in bedroom

As we just said, start now. But before you start putting away money where you can’t get to it for a few decades, make sure you have three to six months of living expenses saved in an interest-bearing account you can access easily.

Just because you don’t plan to quit your job today or haven’t yet experienced a costly emergency doesn’t mean these events won’t happen. You’ll sleep better at night if you have a safety net.

Pro tip: Here are some truly unconventional ways to boost your bank account.

Put away the maximum

Puwasit Inyavileart/Adobe Man counts the coins piled up on the table

Contribute the maximum amount to an IRA, any retirement accounts offered at work, a health savings account, and any other retirement vehicles for which you are eligible.

Funding your accounts as aggressively as you can now will pay off later, because of the magic of compounding interest.

Compare interest rates

Jo Panuwat D/Adobe  Hand putting wood cube block with percentage symbol icon

Compare the interest rates you pay on debts to the interest rates you can earn by investing now. If you are paying more in interest on your debts, focus on paying down debt aggressively.

On the other hand, if you are earning more money on investments, pay down debts more gradually and invest the rest of your cash so it will grow faster.

Pro tip: Here are some ideas for how to crush your debt.

Guard your credit score

Song_about_summer/Adobe credit score concept on the screen of computer

Do what it takes to improve your credit score. Be especially mindful of not spending so much that you get close to your maximum credit limit. As a general rule, try to keep debts to less than 30% of the credit you have available overall.

Also, don’t open too many lines of credit. The bonus you might earn for opening a store credit card is not worth the hit your credit score will take.

Set up automatic payments

Blue Planet Studio/Adobe man use credit card for shopping payment

Set up automatic payments for your utilities, car or house payments, rent, phone and internet, and any other regular monthly expenses. This will prevent late or missed payments and keep you from paying late fees or damaging your credit score.

Set up automatic transfers

NicoElNino/Adobe Online banking on smartphone with businessman showing screen

If you set up automatic transfers from your bank account to an investment account, you won’t miss the money because you won’t see it in your account.

You can fatten your retirement funds consistently with almost no impact on your daily budget if the money comes into and immediately transfers out of your bank account.

Maximize matching funds

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If you can only choose one or two ways to save for retirement, pick the methods that get you matching funds from your employer, like a 401(k) or HSA.

Once you’re in a more stable financial situation, you can start saving through other investment vehicles. But for now, building up your funds from the beginning with extra money from your employer can give you a big boost.

Consider your risk profile

Кирилл Рыжов/Adobe photo of man in suit taking money out of mousetrap

If you’re a younger millennial, you have decades until retirement. So, you might consider taking more risks with your investments with the hope of gaining more returns over the long term.

Unlike your older counterparts, you might have the time to recover from losses. But be aware that high-risk investments do not guarantee high returns, or even any returns at all.

Review your finances every quarter Couple managing the debt

Reviewing your finances every three months will help you:

  • Adjust your budget to what’s working and what isn’t
  • Keep your emergency fund in shape
  • Make any necessary changes to your long-term investments and retirement savings

It should also make you feel good about the money you’re earning on your investments, and could even help put you on track to retire early.


LIGHTFIELD STUDIOS/Adobe chess board with cash and black knight

Don’t put all your investment money in one fund, or even one type of fund. Spread the risk around by investing in different sectors or in funds with different objectives.

By diversifying, you might be better protected from major downturns in the market, and that can be key, especially as you grow closer to retirement.

Stay current

0meer/Adobe woman watching tv and using remote controller

Keep up with current events, especially political and economic news, technology and market trends. Also, pay close attention to developments in events that affect your job and industry.

If you understand how systems and events intersect, you won’t be caught by surprise when the economy shifts.

Find a planner you trust

LIGHTFIELD STUDIOS/Adobe advisor and woman sitting at table wile investor signs a document

While you should have a basic understanding of how financial markets and investments work, you may want to outsource the specifics of choosing funds to a professional.

Ask friends and colleagues to recommend a financial planner who will understand your goals and investment priorities.

Minimize living expenses and maximize earnings

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Now that so many jobs are remote, you can work at a job that pays well while living in a place with a lower cost of living.

Use the savings you accumulate from living in a cheaper place and put the money toward your retirement nest egg.

Start another stream of income

TenWit/Adobe  woman selling homemade craft jewelry from a market stall

Maybe you have a little extra time each week that you could spend setting up some kind of side hustle. Anything you’re good at that other people will pay to outsource to you is a good bet for another stream of income and a way to make extra cash.

Invest every penny you make from your side hustle into your retirement funds. That way, you’ll grow your investment without stretching your budget from your regular job at all.

Make do

PiyawatNandeenoparit/Adobe Body of car get damaged by accident

Recent supply chain issues have forced people to keep using things they otherwise might have replaced. That will pay off in the long term.

If you can get an extra year or two out of big-ticket items like cars, the savings can add up over time.

Protect yourself with insurance that fits

Annap/Adobe Application for health insurance

Some kinds of insurance — especially health, life, auto, renters or homeowners, and insurance on high-ticket objects — can end up protecting your money in an emergency. The key is to choose the forms of insurance that offer the best protection at the lowest cost.

Focus on yourself

Albert/Adobe Relaxed dark skinned boy takes air in the street

Parents often focus on funding their children’s college funds instead of investing for retirement. However, the college landscape is constantly changing, and scholarships and financial aid typically can pick up the slack when it comes to covering school costs.

If you have put all your money away for your kids, you won’t be able to retire without going to live with them. Fund your retirement instead of your kids’ 529 plans.

Don’t fall for fads

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Cryptocurrency in 2018, NFTs now, tulips in the 1600s — they’re all fads that promised extremely high returns by disrupting the system.

But what happens if you get caught if these fads implode and you lose everything you’ve invested? For long-term stability, stay away from fads.

Bottom line

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Most of the methods millennials should use to invest for retirement aren’t difficult or complicated, but building your wealth requires you to harness the power of time. Millennials investing for the future have the benefit of being able to invest over decades before they need to access retirement funds.

So, the most important thing to remember is to start now. Overthinking can cost you years of compounding interest that you will not be able to make up later. If your finances allow for it, start saving for retirement as soon as possible.

FinanceBuzz is not an investment advisor. This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.

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Author Details

Elizabeth Rollins Elizabeth Rollins has degrees in literature and business, and she's combined these loves into a career in writing about personal finance. Her special areas of interest are debt, value, budgeting, education, and retirement.

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