This article was originally published in May 2022. 

Before we get into the tips, and why you should prepare for retirement; consider this:

Let's say you start investing savings of $100 per month right now. If you assume a 6% average yearly return on your investment, you'll have $46,000 in 20 years and $192,000 in 40 years. However, if you wait 10 years to start investing your savings, you'll have just $17,000 in 20 years and $99,000 in 40 years.

Your strategy for retirement should start in your early working years. The commitment to the success of the strategy will have a drastic impact on your quality of life post-retirement.

Retirement is largely seen as a new lease on life, it is the point at which you have the time to fulfill dreams of travel, pick up a new hobby, spend time with family, and overall enjoy life after your career.

The full retirement age is 67 for millennials, and the average life expectancy for Americans is 78.7 years. The average retiree spends $48,000 per year, according to the Bureau of Labor Statistics.

By that calculation, the average millennial will spend $609,600 post-retirement. Remembering these tips will give you an advantage in retirement and help you achieve financial success in your golden years.

Fund An Emergency Account

Without having to rely on credit cards, which can take a long time to pay off while potentially charging high interest, emergency funds provide a financial buffer that can keep you afloat in a time of need.

If you have debt, having an emergency fund is extremely crucial because it can help you avoid borrowing more.

Maximize Tax Deferral

Contribute automatically to tax-deferred eligible plans, like 401(k)s, where you can invest pre-tax dollars in a variety of mutual funds. If an employer match is available, contribute enough to qualify.

Saving for retirement through a tax-deferred vehicle can provide a boost over time, allowing you to avoid paying taxes while your money grows and potentially lowering your tax bill when income is taken.

Also Read: Safer Than Stocks, Bonds And Gold? 2 Companies Offering Bitcoin Retirement Plans For Employees

Tackle Debt Simultaneously

Pay off the smallest of all your loans as rapidly as possible using the “Snowball Method.” When that loan is paid off, roll over the money you were paying toward that loan to the next-smallest debt you owe. This approach should ideally continue until all accounts have been paid off.

As you move money from the smallest number to the next on your list, the total "snowballs" and grows larger and larger, speeding up the debt repayment process.

Maximize Health Savings Account (HSA) Contributions

A powerful tool for retirement savings, a health savings account is a tax-advantaged saving account intended specifically to pay healthcare costs. Contributing to the account and using it to pay for eligible medical bills might save you a lot of money on your overall health care costs.

Think Long Term

Behavioral finance expert Shari Reiches told Business Insider: "Everyone's like, 'These meme stocks can only go up,' because that's what they see on the news. That's what they hear, but sometimes you just need to take a step back and have a long-term view and be diversified and not put all your money in one bucket."

What she meant by that is instead of following trends, hoping to strike it big similarly to a casino, follow the tried and true methods of long-term saving and investing, like buying shares of index funds such as the S&P 500.

Practice Retirement Spending

Practice the “50/20/30” rule, popularized by Senator Elizabeth Warren in her book “All Your Worth: The Ultimate Lifetime Money Plan.”

This is putting 50% of your income towards expenses, 30% towards elective spending and 20% towards saving for future goals, including retirement.

Live Within Your Means

This one is obvious, though, for many people, it is easier said than done. Stay away from credit card offers, loans, and anything that would allow you access to funds that your income cannot cover.

Simply said, your expenses should meet, or be below your income.

Start Early

To bring up the earlier example, at $100 per month saved and invested, assuming a 6% average yearly return on your investment, you'll have $46,000 in 20 years, and in 40 years that will grow to $192,000. However, if you wait 10 years to start investing savings, you'll have just $17,000 in 20 years and $99,000 in 40 years.

The numbers do not lie.