Millennials are already behind in their savings for retirement

Though Mike Monfredi, 31, is not saving for retirement, he is, in fact, investing significantly in a business he hopes will pay off in the long run.

He and his wife are starting a dental business. Monfredi is also a scientist at a government agency.

Monfredi and his wife bought a dental practice. Their cash flow was then used for legal fees, contracting work, a new lease and new dental equipment. They said they’ve spent in the mid six figures and had to take out loans.

How to save when it seems impossible

1. At least get the company match if you have a 401(k) and a match is offered.

Saving less than 4 percent or 6 percent or whatever your company requires in order to get the company match is like walking away from free money.

2. If you can’t save to the match…

… then save 3 percent. Or save 2 percent. Even 1 percent, especially given decades of time for compounding, will work in your favor.

3. Always try to save more.

Revisit your retirement contributions a few times a year and consider making a small adjustment upwards. Don’t forget to check your growing balance. It should serve as an incentive to save a bit more.

“A lot of people think saving for retirement is the way to go,” Monfredi said. He agrees but is betting they will get a higher rate of return on their money from investing in their business.

He still finds it terrifying not to be saving for retirement at the moment – and plans to as soon as the business is more established. Monfredi is helping set up the new company’s 401(k) plan for their six employees. The couple also plans to start contributing in the first or second quarter of the new year.

“It has the potential to be much higher than we could get by investing in the market,” Monfredi said. He admits they are taking on additional short-term risk.

“It’s a calculated risk as long as you understand all the factors in play,” Monfredi said. “At the end of the day, personal finance is personal.”

More in Personal Finance:
5 things to do in your 30s to save your financial life
Want to be rich someday? Do these three things
Here’s what you need to know to start a successful side hustle

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