By Ricky Biel, CRPC

A big misconception I’ve seen in the news lately is the idea that Millennials are poor money managers. While they may be spending their money on designer coffee more often than their parents and grandparents, they’re very much aware of the importance of saving now for a retirement 30, 40 or even 50 years in the future.

According to a Fidelity study, Millennials have increased their savings rate more than any other generation, with the average 20-something saving 7.5% of their income (versus 5.8% in 2013). While Generation X and Baby Boomers are still saving larger percentages, they haven’t increased their contributions as much.

It’s great to see the young generation actively working towards saving more. Their 7.5% is a great start, but it’s still 12.5% less than what financial experts generally recommend saving. As a 20-something, you may feel like it’s impossible for you to stretch your dollars any further and save more than twice as much for your retirement, but it is possible. It’ll take some work, but these five strategies can help turbo-boost your retirement savings.

On average, people in their 20s and 30s pay an average monthly student loan payment of $ 351.00—a significant chunk of change that could instead be contributed to their 401(k) or an IRA. While there’s no magic wand for making student loan debt disappear, you can aggressively tackle it.

If you have multiple loans with varying interest rates, consider applying for a consolidation loan, which is one loan that combines your multiple loans with an interest rate based on the weighted average of your underlying loans’ interest rates. Consolidation is by no means necessary for newer loans, but if you have older loans, you may be able to access more beneficial repayment programs. (For related reading, see: Time to Consolidate Your Student Loans?)

When you’re young in your career, it can be hard to save 20%. Cutting back on non-essentials can help you make up for any perceived paycheck loss. Review your monthly bills and see where your money is going. When the average cable bill is $ 99 per month, consider first cutting the cord on cable. Instead of purchasing movies or books, check them out for free from the library or borrow them from friends. 

While you don’t have to eliminate all guilty pleasures, be it massages or Starbucks coffee, try to reduce some of them. With the money you save, contribute to your emergency fund or retirement plan.

If your company offers a 401(k), you are hopefully already contributing to it. If not, now may be a good time to start, even if it’s just 3% of your pay. If your employer matches your 401(k) contributions, you’re essentially receiving free money for no additional work. Ask your company if they offer a 401(k) match and what the parameters are. (For related reading, see: How 401(k) Matching Works.)

One of the most common employer matches is $ 0.50 for every $ 1 you contribute up to 6% of your salary. Employer matches are anticipated to make up 50% of retirement savings for Millennials, so maximize your contributions to save more each year. Want to boost your 401(k) savings further? Some plans let you automatically increase your savings. Depending on your salary and budget, aim to contribute an additional 1% each year.

As a 20-something, you have time and compound interest on your side. Compound interest helps the money you put away grow faster due to interest building upon itself. Consider this: if you were to invest $ 500 per month for 40 years and receive an average of 6% in annual returns, you would accumulate $ 995,745.

Along with compound interest, you have more time than your parents, so you can invest more aggressively in hopes of attaining greater growth. However, you don’t want to chase unrealistic returns in the hopes of cashing in big rewards. You still need to maintain a proper asset allocation so your portfolio can grow healthily without too much risk.

As you grow your income, accumulate assets and actively try to save more for retirement, working with a knowledgeable financial partner you trust will become more important. Millennials are notoriously underserved in the financial services industry. Often, 20-somethings are intimidated and assume they don’t have enough investable assets to work with an advisor. As a result, they try to plan for the future on their own and may have trouble determining how to best set a budget, pay off debt or save. 

Working with a financial advisor not only helps you plan for the future, but also helps you stay accountable and on-track as you work toward your goals. An advisor can help you determine how aggressively to invest, evaluate new opportunities for saving and answer your questions regarding student loan debt.

Taking a few small steps now can make a big difference down the road when it comes to finance. By proactively saving for retirement in your 20s, you can feel more confident in your future and empowered to make informed financial decisions. (For related reading, see: The Millennial Guide to Choosing a Financial Advisor.)

This article was originally published on Investopedia.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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