One of the many questions we get asked is, “When should I start saving for my retirement?”
While it’s a common question for many, the answer is always the same – NOW! In all honestly, it doesn’t really matter how old (or young you are) because it’s always a good idea to start thinking about retirement no matter where you are in life. While it is ideal to start thinking about your retired future as soon as you get your first job, it’s a topic not many ponder about until about their 30s.
Ideally, you should start saving for retirement in your 20s, after your first “real” job, but many usually like to have a bit of fun before they start putting away money for their golden years. But the truth is, even if you’re in your mid-30s, you can start planning for your retired future. The sooner you start thinking about your financial future, the more money you’ll have saved. You never want to just rely on social security in your later years. That’s why it’s vital to start saving for retirement as early as you can. You want your money to grow and work for you. Each year’s gains will double and so on – which is a very powerful wealth-building tactic that’s called “compounding.”
Just remember that the longer you put it off, the more money you lose out on.
Let’s say you start saving for retirement at 25, putting away $3,000 in a tax-deferred retirement account for the next 10 years. But then you stop saving entirely. When you get to 65 years of age (which is considered the age you can retire), you’ll have invested more than $338k (that is with a 7% annual return). If you saved off putting any savings away for retirement until you were 35, you’d have put aside about $90k. That would grow to about $303k, which is significantly less than if you would have started 10 years earlier.
Starting out early can be very beneficial to your retirement fund. But don’t kick yourself in the butt if you’re a little late to the savings game. You can definitely make it up and we can help! We have various ways to save for retirement and will guide you as to what your best options are. Don’t delay another second and give us a call! We will help you have a financially fit future that won’t just rely on social security.