• For Generation Z, retirement is 40 or 50 years away, but now is the time to start saving.
• Investing early and establishing healthy financial habits is the key to a successful retirement.
• Four financial experts shared their best strategies for kick-starting retirement savings.

For generation Z When you’re just starting to enter the workforce, retirement may seem too distant to be a concern.

Or especially Generation Z, student loan debt, high costs of living, and tough job market. With rising national debts, many young workers are increasingly worried that they won’t have access to the resources Boomers have today, like Social Security and Medicare.

Only 15% of Generation Z deposits a certain percentage of their salary into a savings account each month. Only 20% contribute to a 401(k) or retirement account, according to Bank of America.

But when it comes to saving for retirement, there’s no such thing as starting too early. In fact, the biggest advantage of Generation Z is time.

Business Insider asked four wealth advisors for their best tips and tricks on how Gen Zers can maximize their retirement savings right now.

Andrew Crowell, DA Davidson’s vice president of asset management

The biggest piece of retirement advice, according to Crowell and other experts, is deceptively simple: Start early.

“Even with just a modest allocation to investments, your money has the potential to double every 7 to 10 years,” Crowell said. This means that for Gen Zers in their 20s who are just starting their careers, their money has the potential to double by at least four times.

Benefit from your workplace pension scheme, for example 401(k)where you can deposit part of your salary into an account. Employers often match employee contributions up to a certain percentage, usually between 3% and 6%.

When investing for the long term, Crowell recommends putting your money in high-yield assets like stocks. inflation It won’t erode your savings. The S&P 500 has returned 13% annually over the last decade, well above inflation.

Basic budgeting strategies, such as keeping housing costs to 30% or less of your total salary, can also create a strong foundation for retirement savings, Crowell said. But don’t panic if rent is taking up a larger portion of your take-home pay and is preventing you from saving as much as you’d like.

“Their highest earning potential will be somewhere years from now, and they just think the cost of living is too expensive,” Crowell said of Generation Z.

No amount of savings is too small. “It doesn’t matter how much you save out of your paycheck to get started. You can roll that over at any time in the future,” Crowell added.

Ayako Yoshioka, senior portfolio manager at Wealth Enhancement Group

Yoshioka pointed out that there are other ways to save for retirement other than the traditional 401(k). Self-employed individuals can take advantage of a Simplified Employee Pension (SEP) IRA to save for retirement and benefit from tax-deductible contributions.

A. Roth IRAThis app, which allows you to contribute after-tax dollars for retirement, is also a great choice, Yoshioka said. Once placed in a Roth IRA, contributions and earnings grow tax-free and can generally be withdrawn tax-free in retirement.

For those who like to pick individual stocks and funds, opening a brokerage account and building your own portfolio is another way to invest your savings. But for stock traders, Yoshioka notes that capital gains tax is levied on the profits of an investment.

It’s critical to keep the big picture in mind when it comes to retirement savings. Yoshioka said there will undoubtedly be boom and bust cycles in the stock market, but he will continue investing. During the Great Financial Crisis, some people took their money out of the market to protect their assets and never put it back.

“When you don’t get it back, you have money, but inflation eats it up and you miss out on a lot of the growth in the stock markets,” Yoshioka said.

For Generation Z, who hasn’t experienced many economic cycles, it’s important not to panic in the short term. Stock markets usually recover within a year; this is simply a splash in a retirement portfolio spanning 50 to 60 years.

Ashley Weeks, wealth strategist at TD Bank

Now more than ever, a successful retirement depends on personal savings, Weeks said.

Historically, retirement income came from what has been called the “three-legged stool” of Social Security, pensions, and personal savings. But today, Weeks notes, fewer than 15 percent of individuals in the private sector will have access to retirement and the future of Social Security looks uncertain, meaning the burden of adequate retirement is increasingly falling on the individual’s shoulders.

According to Weeks, target date funds It can be a useful tool for saving for retirement. Many company 401(k) plans offer these, and they automatically rebalance portfolio compositions to minimize risk as you approach retirement. A target date fund typically has a higher allocation to riskier assets such as stocks early on and increases its exposure to less volatile fixed income assets as time goes on.

It’s important to approach saving for retirement with the right mindset. “Start saving early and treat retirement contributions like a monthly living expense,” Weeks said.

Alanna Morey, Ameriprise’s private wealth advisor

According to Morey, establishing basic budgeting habits is the key to success in retirement.

There’s no one-size-fits-all way to budget, but one popular strategy Morey recommends is the 50/30/20 rule; This means that 50% of after-tax income goes to essential costs, 30% to discretionary expenses, and 30% to discretionary expenses. 20% towards savings or other financial goals such as retirement or home purchase.

But before saving for retirement, Morey recommends building a basic savings fund for emergencies by putting money in the bank or a high-yield savings account. Once you’ve saved enough money to cover basic living expenses for a few months, it’s time to start thinking about contributing to a 401(k) or other retirement plan.

Morey also recommends automating payments as much as possible. Credit card payments, rent payments, savings, and 401(k) contributions can all be automated to reduce extra hassle and encourage healthy financial habits.

And avoid credit card debt if possible.

“If I’m paying 20 percent interest on my credit card, I’m paying 20 percent more on everything,” Morey said. This can quickly deplete your ability to save. If you have credit card debt, make sure you know what interest rates you’re paying and have a plan to start paying off your debt.

“These habits are hard to change or create later, and it’s also harder to capture savings later,” Morey said.