This post was originally seen on Forbes.com.
Centenarians, or people living to be at least 100, have always been a rare breed. Think about it – how many people do you know who’ve lived for over a century?
But that could be changing.
According to the Centers for Disease Control and Prevention, the number of people living to be over 100 is growing fast. While that seems like good news on the surface, it brings up an interesting dilemma: Can you really afford to live that long?
Related: 30 Things I Learned from My Mother
Choose A Low-Fee Retirement Account
Even though investing is one of the best ways to build wealth, the fees that come with it can drain your life savings.
According to an example from the SEC, fees of 1% can reduce your portfolio by $30,000 compared to an annual fee of .25% over 20 years.
Index funds and ETFs are popular options for steady returns and low fees. Stick to fees less than 1% and remember that high fees are not necessarily correlated to higher returns.
Start Where You Are
The best thing that millennials have going for them is time. They may not have their parent’s high salaries or their grandparent’s pension packages, but they have decades to save.
While some millennials may feel unable to devote money to a retirement account on top of paying off student loans or other debts, they need to start now. Even if they can only contribute $25 or $50 a month to an IRA or 401(k), it’s crucial that they start as soon as possible.
The power of compound interest means that starting to save for retirement at 25 requires you to save much less than if you waited until you were 35.
If your employer offers a matching program for their 401(k), make sure to always put in enough to receive the match (after all, what’s the point of wasting free money?) You should also ask to see what their vesting schedule is.
A vesting schedule tells you when you’ll be eligible to take out the employer’s contributions to your retirement plan. For example, some plans have a five-year vesting schedule where you receive an extra 20% of your employer’s contributions. After three years, you’ll only be able to take 60% of what your company has contributed.
When you receive a raise or bonus, put that money straight into your retirement account instead of spending it. Do this until you reach the maximum that you can contribute – $5,500 to an IRA or $18,000 to a 401(k).
Create Forms of Passive Income
While it’s easy to say now that you’ll be fine working into your golden years, no one can predict how they’ll feel in the future. Maybe you’ll be physically unable to work in your 70s or you’ll want to spend that time doing something else.
That’s where passive income comes in. Passive income is money you earn with minimal effort. One of the most popular forms of passive income is rental income, aka being a landlord.
Blogger Elizabeth Colegrove of The Reluctant Landlord, who currently has eight rental properties, said she and her husband have sacrificed a lot to buy these properties. That’s because she’s counting on them to provide enough passive income, along with her husband’s military pension, to support their lifestyle in retirement.
“Our goal is to work hard now so that later we have the assets to enjoy life to the fullest as long as we live,” she said.
You don’t necessarily have to become a landlord. You can also start your own business or choose a mutual fund that pays out regular dividends to its shareholders. Even for millennials who don’t plan on retiring early, having a way to earn money without working could help when you’re simply unable to be in the office.
“You really don’t know what your health and Social Security situation will be, so it’s best to do as much as you can to create passive income over time,” said author and business coach Amanda Abella.
Become Debt-Free – And Stay That Way
One of the best ways to increase your likelihood of retiring on-time is to decrease how much money you need to live on. That means not carrying a lot of debt.
While you should start contributing to a retirement account as soon as possible, you should also focus on paying off any debt you have – especially credit cards, student loans, auto payments and personal loans.
There are two great methods you can take to pay off debt. One is the snowball method, which works by paying off your debt from the lowest balance to the largest. Once you’re done paying off the smallest debt you owe, you take the amount you were putting toward that debt and put it toward the next lowest.
The other option is the avalanche strategy, which dictates that you should pay off your debt from highest interest rate to lowest interest rate. You’ll save the most money on interest if you choose this method, but it may take you longer to pay off each individual balance.
No matter what method you go with, commit to becoming debt-free. Once you pay off all your debts, you can start saving for a down payment or putting more money into your retirement account.