Investment Advice for College Graduates

It’s graduation season and the message from the financial planning industry can be boiled down to four basic themes: Retirement saving, debt management, investing and career planning.

Combing through the feedback from dozens of financial advisors regarding their best advice for college graduates entering the workforce this year, the consensus winner is a fondness for Roth IRAs and employer-sponsored retirement plans.

“Max out your Roth IRA for the first 10 years of your working career,” said Michael Hansen, co-founder and managing partner of Frontier Wealth Strategies in Walnut Creek, Calif.

Whether it’s pegged to growing fears over the future of Social Security benefits or the basic tenet of compounding, advisors are stressing the importance of saving as much as possible as early as possible.

“Please sign up and participate in your company’s 401(k) plan,” said Robert Wesley Shannon, co-founder of Brazos Wealth Advisors in Ft. Worth, Texas.

We’re speaking about college grads, so it makes sense that debt management also emerged as a regular financial planning topic.

“Write down a plan for getting out of student loan debt, which should include whether you're going to refinance, or which repayment plan you’re enrolled in,” said Rob Schultz, senior partner at NWF Advisory Group in Encino, Calif.

“Dates should be put in your calendar such as when you're going to submit the employment certification form if going for public service loan forgiveness and when the application for forgiveness should be submitted,” he added.

Advice for College Grads

Investing is technically part of retirement saving, but advisors also encouraged investing beyond retirement saving when possible.

“Your first home purchase should be the perfect rental because you are not going to sell it but rent it out when you are ready to move to a bigger and better place,” said Hansen of Frontier Wealth Strategies.

And, of course, along the way don’t neglect yourself and your career.

“Invest in yourself through professional education, networking and mentorships, because developing skills and increasing your earnings power is time well spent,” said Edward Jastrem, chief planning officer at Heritage Financial in Westwood, Mass.

Brad Brescia, senior financial advisor at Moisand Fitzgerald Tamayo Financial Planning and Wealth Management in Orlando, Fla., wants to remind graduates of the precious value of youth and time.

“You'll never have more time in your life than you do right now, use it wisely,” he said. “Take your early career years to build as much personal capacity as possible, which could mean you volunteer for the project, read the interesting article, pick up the book, have that coffee with the new connection.”