We believe in Wildcats helping Wildcats, so in our email last month* we asked alumni all over the country for their advice on generating extra income for retirement. We received a lot of responses from experienced alumni with a variety of backgrounds, but a few pieces of advice bubbled to the top.
So, how do you generate extra income for retirement? UA Wildcats suggest that you save early, save often and do some work on the side.
Save as much as you possibly can, as early as you can.
Although a simple piece of advice, we all know how hard it can be to a) start saving and b) actually stick to your saving plan. For alumni new to the workforce, you can start out by participating in your company's 401(k) plan.
"If your company has a 401(k) program, join and contribute as much as you can each and every year. Don't forget...each and every year."
Some companies will even match your contributions up to a certain percentage, helping you save even more!
Unfortunately, not everyone can just "start saving." We have bills, expenses and student loans. In fact, nationwide, the average college graduate last year entered the workforce with $37,172 worth of student loan debt to pay off. Any sort of debt is not the most ideal money-saving tool, but if you make some lifestyle changes, you can do both.
It's 2017, it's time to start automating.
An easy way to make sure you save every month is to setup automatic withdrawals from your paycheck. An automatic withdrawal is not new or revolutionary but is an extremely effective way to hit your saving goals each month.
As one alumnus puts it, "As soon as you get a paycheck, set up an account at the bank and start putting money aside. Like paying you first."
The theory here is that if the money never hits your checking account, you'll be less tempted to spend it.
Philip Bagdade, Portfolio Manager at Baker Ellis Asset Management in Portland and a 2012 Eller Finance graduate, shares his advice for using banking automation:
"With the global advances in automation, far too many people do not automate their finances. Online banking easily accommodates automated plans that direct part of each paycheck to investing, savings, and rainy day accounts. Automating these processes can reduce temptations to spend and help remove emotions from the investment process. Aim to direct at least 15 percent of each paycheck to these accounts and marvel with Albert Einstein at the power of compounding!"
Start doing some work on the side.
OK, so you're taking advantage of your company benefits and you've got full-proof automatic withdrawals to your savings account. Now what?
Think about taking on a side-hustle. Side-hustles are on the rise and can be a great source of extra income, especially if you are just starting out in your career. If you're having trouble coming up with an idea for a side-hustle, a '66 Chemistry grad says, "Do what you have a passion for, and figure out how to make it pay."
I'm sure you've heard that one before, but there is truth to it. If you already have a passion for something outside of work, use it as a resource for extra income. Hey, you're already doing it for free ― why not try and get paid?
In addition to doing what you're passionate about, here is a list of 50 jobs you can do from home.
If you already have experience, you may have a side-hustle waiting for you. One alumnus suggests consulting in your area of expertise.
Think about it, you've been developing your skills, learning and growing throughout your career. You have knowledge and expertise to share, and consulting on the side can really help you generate extra income. Sadly, "how to become a consultant" is beyond the scope of this article, but we think it serves as the perfect topic for our next career survey!
Do you use your expertise to make more money outside of your normal job? Share your tips with other UA alumni in this short survey. We'll gather responses and share them in our June email.
*Didn't get our email last month? Get in touch with us to get on the list. We send a monthly newsletter to keep you in the loop with all things career! You'll get information on all of our upcoming events and advice you can use in your career.