5 tips for retirement planning under 40

By now, you may be feeling a little more stable in many areas of your life. You may even be earning more and have a family, and life is probably moving fast. With so many priorities, do you ever wonder how to balance your family, future and finances? 

It’s never too early or late to think about your future goals and create a plan to get there. 

Focus on your spending and savings …

Build a budget

Knowing where your money goes can help you spend wisely and save more. Build a budget when you log in to your retirement account experience to see how and where you are spending your money, and where you can start saving.

Build an emergency fund

Life is full of surprises. Shield yourself from unexpected expenses by saving three to six months of living expenses. Save time and set up automated savings. Watch our Voya Learn video on how to build an emergency fund for more detailed information.

Save for retirement

Consistently saving over time will pay off later: 

• Aim to save 10% to 15% of your pre-tax income in your employer-sponsored retirement account.
• Even if you start small, think about increasing your contributions every year by 1%.
• If your employer offers matching contributions, take advantage of the free match.
• Consider contributing to an IRA — which one? 

Well, it’s a question of when you want to be tax-free. Individual retirement accounts, or IRAs, boast a wealth of tax benefits that can give your savings a boost. Both have benefits and limits, and both can give you a tax break now or later. Here’s the difference: 

• Traditional IRA: Your contributions are made before taxes, so earnings reinvest, improving potential savings growth over time. 
• Roth IRA: Your contributions are made after taxes for tax-free income in retirement.

Ditch the debt

Imagine not owing anyone anything. As you save, consider paying down your debt by tackling the highest interest rate first. Once your debt is paid, roll those payments into savings. 

• This includes student loan debt — there are repayment options. Ask your employer if they offer loan repayment benefits, and just like credit card debt, continue paying off your balances over time.

Protect yourself and your loved ones

Be sure you have enough disability, life and health insurance. And if you have a high-deductible health plan, consider funding a Health Savings Account (HSA). Not eligible for an HSA? Consider a Flexible Spending Account (FSA). Both can be used to pay qualified health expenses, but here are the differences: 

• A Health Savings Account is a triple tax-advantaged account funded by you and is more flexible; withdrawals are allowed with a penalty, and contributions can be rolled over to the next year and can be carried into retirement. 
• A Flexible Spending Account is a tax-advantaged account funded by you but is employer-owned and less flexible; withdrawals are not allowed, and contributions cannot be rolled over to the next year.

And be sure to consider getting guidance from a financial professional if you need it, so you ensure your investments continue to match your goals.

Log In Log in to your account to use myOrangeMoney, an interactive tool, that allows you see how increasing your retirement savings by just a little can help fund your retirement income for the long term.