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Personal finance, retirement tax tips for new graduates

May 26, 2018

Graduates tossing mortarboards (2)

Congratulations new graduates!

If you're soon marching or have marched down the aisle to Pomp and Circumstance to receive your college diploma, welcome to the rest of your life.

I remember that first summer after getting my sheepskin. It meant the part-time job I had at the local newspaper became a full-time gig. And that meant more money.

That also meant a do-it-myself crash course — pre-internet! — in personal finance.

Things worked out fine for me, but I admit it was simpler back then.

Not that I'm that old, but college costs for a state university in Texas weren't yet out of control. So, thanks to summer and part-time jobs while classes were in session plus grants and scholarships, I didn't have to deal with any student debt.

And housing costs in my West Texas college town were reasonable enough so that I could afford my own place, sans any roommates, even on a journalist's starting salary.

My how times have changed.

Welcome to adulthood and finances: Even if you don't have a lot of financial responsibilities as a new college graduate, you need to have a personal finance plan in place so that as your career advances and earnings increase, you can make the most of your evolving circumstances.

That's where the Saturday Shout Out comes into play.

It goes this week to Teresa Mears, one of my personal finance pals, who has a good piece at Living on the Cheap with 13 money tips for new college graduates.

Start retirement saving ASAP: As someone who's now much closer to retirement than my college days, my favorite tip from Mears is take advantage of employer 401(k) plans.

By signing up for one of these tax-favored savings plans as soon as you can, your nest egg will grow thanks to not only your employer's matching contributions, but also from the sheer power of compounding over the years.

Regular 401(k) plans are tax deferred, meaning your payroll contributions are made before taxes are calculated. But you will eventually owe tax on the withdrawals.

Many companies, however, now offer Roth 401(k)s. Like its Roth IRA cousin, a Roth workplace defined contribution retirement account is taxed up front, but withdrawals in retirement are tax-free.

Check out the additional advice Teresa has regarding retirement savings, as well as her dozen other personal finance tips for new graduates.

And parents of young adults, also take note. Teresa's article includes three bonus tips for y'all in case your new college grad happens to boomerang back home, at least for a while.

You also might find these items of interest:

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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