7 retirement tips for my younger self

There are many things about money I wish a wiser person had told me when I was younger. Now I hope to be that person for you.

In my 20s, I had a hazy notion of stocks but didn’t understand the value of compounding. I didn’t know about dividend reinvestment. I shoved the stock certificates in a drawer and forgot about them until the dividend checks arrived. I felt very swanky cashing them, but I spent the money on things that are long forgotten.

Learn from my missteps. Here are seven tips I’d tell my younger self:

1. You’ll regret not saving

You will get older, and you will want money for retirement.

If you start saving young, you don’t have to do it quite as aggressively, because compounding, because interest, because many decades.

Get in the habit of setting money aside, whether it’s in an IRA or a CD savings account. Add “look for CD rates” to your to-do list.

2. It’s easier when you’re younger

Like having your wisdom teeth removed, some things are just easier when you’re younger.

Learn to save now. Whether you take lunch to work at least twice a week, walk to save bus fare or cut the cord to get rid of your cable bill, find ways to hang on to your money.

For an eye-popping look at how much that measly $8 lunch is really costing you, check our lunch savings calculator.

3. Index funds are easy

Investing in index funds is easy. You don’t have to pick individual stocks or even really know anything about the stock market.

Check out our primer on investing with index funds like a pro with index funds.

4. Keep fees low

Investing is not free. Know that there are fees. And like anything else, paying less is better than more.

24-year-old me, contemplating life and love in Rome -- not saving for retirement.

24-year-old me, contemplating life and love in Rome — not saving for retirement.

5. Cool kids save

There’s nothing dorky about setting money aside or taking your lunch to work to save money.

Feel like a dope next to your friends? Just imagine yourself at 65. You’re retired, volunteering at your favorite charity and taking three-week vacations.

They’re not.

6. Think hard before you buy

That fringed purse, that Thai dinner, that crazy expensive craft cocktail. When you start getting serious about saving for retirement, you’ll probably look back at a lot of purchases and ask yourself, “Why?” Think hard before you waste hard-earned cash on passing fads or momentary desires.

When you do make purchases, though, at least make sure you get something back by using a great rewards credit card.

29-year-old me at a job I loved with a boss I'm still friends with, but still not future-focused.

29-year-old me at a job I loved with a boss I’m still friends with, but still not future-focused.

7. Start ASAP

“I wish I’d started sooner!” “I wish I’d saved more!” That’s what almost all retirees say they wish they had done differently. In fact, not saving for retirement early enough was the biggest financial regret in one of our surveys.

It’s hard to see when you’re decades away from retirement, but when you have a lifetime of financial decisions to look back on, most people wish they had taken advantage of that investing time horizon and saved more.

Your savings can also give you some interest — check rates here on high-interest CD accounts.

Tip of the week

In honor of International Women’s Day on March 8, here’s a career tip that can help your finances: If you don’t ask, you won’t receive.

Women face several obstacles in financial planning. Among them:

  • They’re more likely to take career breaks to care for children or aging parents.
  • They live longer than men.
  • They may be more conservative investors.

“In some cases, their earning power is less than a man might make,” says Christine Marcks, president of Prudential Retirement. “That has improved, but there’s still a gender pay equity issue.”

“Am I being paid the same as a man in my position?”

“It takes practice and courage,” Marcks says, “but we encourage women to ask.”

Will CD rates keep rising?

Each week, I’m going to highlight a question from Bankrate’s Money Masters group, an exclusive Facebook group where members can ask questions and get personalized advice from some of the sharpest minds in personal finance. Join here!

One reader asked if the average percentage yield (APY) is going to continue rising for CDs, and if so, when’s a good time to buy?

CD rates used to be much higher than they are now. The current average one-year CD yields just 0.33 percent, but look at how high they were in the ’80s.

But CD rates are very likely to go up, given the near certainty of the Federal Reserve raising the federal funds rate next week.

Rates for CDs won’t go up immediately, though, so wait till the Fed makes its move before you make yours.

But if you just can’t wait to open a CD, check out some of the current offers.

Jill Cornfield

I'm a reporter at Bankrate, talking retirement – my own as well as yours. Sign up for my free newsletter.