Money

4 things to do immediately if you're in your 20s and have nothing saved for retirement

When it comes to retirement savings, millennials could use some help.

According to a recent Merrill Edge report, only about one third prioritized retirement as a savings goal. Instead, millennials are budgeting for things like travel, dining and fitness. And many people between the ages of 23 and 35 still lack basic financial literacy. Given a set of basic financial questions, just 24 percent of some 5,500 young professionals provided the correct answers, a PricewaterhouseCoopers report shows.

If you haven't started thinking about retirement, or don't have a clue where to start, don't panic. Financial experts have a series of steps you can take immediately — within the next 24-48 hours, in fact — to start a real plan.

"Shift the mindset of using your 20s as a throwaway decade, one where you make lackluster decisions thinking that you've got time on your hands," says Kara Stevens, founder and CEO of money-planning blog The Frugal Feminista. "Begin thinking that it's never too early to save."

Here are 4 simple steps to get on track for retirement:

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1. Call your HR department 

"Schedule an appointment to speak with your HR representative as soon as possible, as in the next 24 to 48 hours," she says.

Seriously, find the number and call.

Ask your representative what options the company offers, for example if they offer a 401(k) or a Roth IRA. Then follow up with questions such whether your company matches your 401(k) contributions and if so, at what percentage.

"Don't be afraid to ask your HR representative to explain your options to you more than once."

Write down the important points and ask if they have a handout that explains some of this information. Don't be afraid to ask your HR representative to explain your options to you more than once.

2. Contribute as much as you can

Ideally, experts recommend you set at least 10 percent of your pretax income, but if you can't start there, even one or two percent is a good first step. You can ask your HR representative to help you do the math so you can figure out if you can afford to part with the money from your paycheck.

"Smart small and soon," Stevens says. "Even if you can only afford to contribute three percent of your income to retirement, do it. No amount is ever too small. Once you get into the habit of saving for retirement, you can begin to increase your allocations by one percent every six months."

"These small changes," she says, "will have big long-term gains for your nest egg."

"Start small and soon." -Kara Stevens, founder and CEO, "The Frugal Feminista"

You may have the option to set up an auto-increase, which allows you to choose the percentage you want to increase your retirement contribution by and the frequency.

"For individuals who are self-employed, or who don't have access to an employer-sponsored 401(k), I'd recommend looking into individual retirement account options like the Roth IRA," says Stefanie O'Connell a millennial money expert and author of the book, "The Broke and Beautiful Life."

3. Make a budget 

Saving for retirement is impossible without taking two other crucial actions: Make sure you have an emergency savings account, and stay on top of your student loan debt.

Create a budget that takes into account all of your spending, a monthly amount you put into a separate emergency savings account and money that goes towards your student loan payments.

"The first thing I want 20-somethings to do is learn to budget," says Chris Hogan, financial expert and author of "Retire Inspired."

"Give every dollar an assignment toward rent, groceries, car payment, student loans, saving and so on," he says.

After you make a budget, aim to create an emergency fund as soon as possible, O'Connell says.

"Retirement investments are typically inaccessible until around age 59.5, so having some liquid assets can provide a valuable buffer in case of an emergency," she says.

"I recommend every young professional start out by building some liquid savings in a high yield savings account," she adds. "Once you reach a months' worth of living expenses in savings, starting splitting savings between investments and added savings."

Once you have a small financial cushion, add more to it until you get to six months worth of living expenses, experts recommend. That way, if you lose your job or have to pay for a large bill like a hospital bill, you can do so without going into debt.

4. Get real about your lifestyle

If you want to retire well and live large down the line, you have to be realistic about how you're currently handling your money.

"The desire to feel grown up can move millennials to buy costly furniture, live in a swanky apartment in a trendy neighborhood without a roommate and indulge their wanderlust," Stevens says.

To start being more budget-conscious, consider paying with cash or using a free budgeting app. Collect your receipts and review them once a week to see what you need to spend less on, a weekly habit that helped one millennial save thousands of dollars.

Above all, Jamila Souffrant, a certified financial education instructor, blogger and money coach, says young professionals shouldn't lose hope.

"If you're in your 20's and have yet to start saving for retirement, don't worry," she says. "It's not too late to start."

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