What Will It Take To Live The Good Life?
I’m sure the word “retirement” sounds like something that is far in the distance and doesn’t bother you at all. However, for many, retirement sneaks up on them a lot faster than they expect. Don’t ever let anyone tell you it’s too early to save for retirement because it isn’t. Just wait until you find out how much money you could have when you finally decide to retire as long as you start saving now. Like they say, “the early bird catches the worm”.
Ideally you should start saving for retirement as early as your 20s. You have probably started working and picking up more hours (depending if you’re a full-time student or not) and are getting consistent paychecks. Putting small percentages of this away towards a retirement fund it easily one of the smartest decisions you can make. It may not seem like a great decision at the time; you’re take money away and putting it somewhere that isn’t very liquid (easy to access) for a time in your life that is way down the road. Don’t worry, you will understand when you retire.
Take a look at how much money you can potentially make if you start saving early. Let’s say you start saving at age 25 and put just a few thousand dollars a year, $3,000. This is only $250 a month which can easily be the amount of money one spends at restaurants for a month (it’s a simple sacrifice). You put this money into a tax-deferred retirement account like a 401k. You do this until you’re 35 and then you stop completely. Yes, you quit putting any money into your 401k and get to reap the full benefits of your paychecks. By the time you are 65 (an ideal age for retirement) you will have nearly half a million dollars! That’s right. A simple $30,000 investment over the span of 10 years just turned into $472,000. Now, imagine if you kept investing all the way up to 65. That’s rough, but you can also start even earlier. By saving right at 20 (it doesn’t have to be $250 a month, it can be less) and saving all the way to 35, you can plan on getting up well over half a million dollars. That’s a lot of dough that seemingly came out of nowhere. This is why saving early is so important.