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Personal finance, retirement tax tips for new graduates

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.

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