It pays to start early when saving for retirement. The sooner you begin the better the outcome because when it comes to retirement, time really is money. Yes, you’re going to receive social security, and it is an important part of everyone’s retirement plan, but you cannot rely on Social Security to take care of all your retirement needs. Most likely it will only account for 35 to 40 cents of every dollar you need to retire comfortably. The rest needs to come from your company’s retirement plan and your personal savings.
We’re Living Longer
Adding to this challenge is that we’re all living longer. If you’re in good health when you retire, you could very live well into your eighties and beyond. It’s possible that you could live 30 years or more in retirement, almost as long as you worked. So the sooner you start saving and investing, the longer your money has to work. Even a few years can make a big difference.
The Power of Starting Now
Consider two investors. Sarah, who’s 21, starts saving $100 a month and does it for nine years, stopping at age 30, for a total investment of $10,800. Scott, on the other hand, starts saving $100 a month at age 30 and continues all the way until they turn age 65, 35 years, for a total investment of $42,000. If both Sarah and Scott get an 8% return, Sarah will retire with over $231,000 at age 65, while Scott will only have $215,000.
Just think how much further ahead Sarah would would be if they had continued making their monthly contributions all the way up to when they retired. Imagine if they saved more than $100 a month.
Put Time On Your Side
The number one factor that determines if you will be able to retire comfortably and remain comfortably retired is how much you save and how soon you start. Do yourself a favor. Start now and give your money plenty of time to work for you.
And be sure to own the right kinds of investments, the kind that grow. Many make the mistake of being unwilling to accept market volatility. Volatility is the price of growth. When you own the great companies of America and the rest of the world you put them to work for you. That is where the profits and the growth happen.
Get Help
This is why you need to work with an experienced advisor. You need someone to help you keep your costs and your emotions under control. It is worth it many times over.
It pays to start early when saving for retirement. If you do you’ll have enough money for everything you need for as long as you live.
