5 Ways People Can Start Saving in College for an Early Retirement

Ask any financial expert how to reliably build wealth and they’ll tell you to start young and let your money compound over time. This is especially helpful advice if you want to retire early.

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Consider these tips from experts and early retirees to accelerate your own retirement plan .

Money mistakes the super wealthy never make - that you might be doing now.

Invest Early and Consistently

Alan Andrews of KIS Finance decided to keep working — but his former colleague didn’t.

“My friend and colleague retired by the time he was 45. The moment he turned 18, he started investing $100 a month from his pocket money into Treasury bonds. When he landed his first job at the age of 19, he increased the investment to $500 a month. By the time he reached 20, he was investing $1,000 every month, and kept on increasing the deposit as he earned more, up to $3,000.”

The takeaway? Start investing as soon as possible and stay consistent with it.

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Keep It Simple

While Andrews’ friend started with Treasury bonds at first because he didn’t know how else to invest his savings, there are other options that don’t involve picking stocks or obtaining an advanced degree in finance.

If you don’t know what to invest in, start with VTI (Vanguard’s Total Stock Market ETF). It gives you broad exposure to U.S. stocks at every market cap and every sector of the economy. As you get more comfortable with investing, you can start investing in multiple ETFs, such as international stock funds.

In the beginning, though save yourself the stress and keep it simple with just one or two exchange-traded funds (ETFs).

Compound Money Tax-Free in a Roth Account

Roth retirement accounts don’t give you an immediate tax deduction, but your investments compound tax-free. When you eventually withdraw funds in retirement, you pay no taxes on that money.

Joel Ohman, certified fnancial planner with Clearsurance.com , sees clients retire young when they start investing early, knowing they won’t pay taxes on the exponential growth of their Roth investments.

“Since there is no minimum age requirement to start a Roth IRA or 401(k), early retirees can save in college if they’re working while going to school.”

Ohman cautioned young savers to keep the big picture in mind for their finances.

“Don’t accumulate credit card debt just to contribute to a retirement account.”

Don’t Raid the Piggy Bank

You could max out your Roth IRA contributions every year, but it won’t help you in retirement if you frequently tap the account to supplement your lifestyle or cover unforeseen bills.

Instead, “Make sure to keep an emergency fund to cover unexpected expenses so you don’t get derailed,” Ohman said.

Think of your retirement accounts as locked. If you consider withdrawing funds early to buy a home or for another reason, talk through the decision with a financial planner first. It can be easy to justify bad financial decisions — and even harder to rectify them later.

Attend an Affordable School

It’s not surprising that crushing debts can hold you back from retiring early. This includes student loan debt.

Patricia Roberts serves as COO of Gift of College Inc. and helps college students avoid debt.

“Making a sensible decision about which college or career school to attend is a critical first step in setting yourself up for financial success down the line. Not planning ahead for the cost of college, or selecting an unaffordable ‘dream school,’ can lead to years of stress and a less-than-comfortable retirement.”

The more you can save and invest, the earlier you can retire. But don’t stress about it. Even if you can only contribute a little each payday, do what you can. Every dollar you invest in college will multiply between now and your retirement and may even let you retire early.

“Grads who are not weighed down by student loan payments can pursue their dream careers, start saving for retirement from day one, save for a first home purchase, and achieve other adult milestones that can have a big pay off in the long run,” Roberts added.

This article originally appeared on GOBankingRates.com : 5 Ways People Can Start Saving in College for an Early Retirement