If You're Working, You Should Be Saving - And Hurry Up!
Unlike your fellow Americans on this blog in their teens and twenties who are getting a head start - you are getting a late start saving for retirement.
I know 30 is the new 20, you're delaying marriage and parenthood, focusing on your career, living it up, blah, blah, blah. Well guess what, you'll be 60 someday too and if you aren't already saving, you're behind.
People in their teens and 20's have the power of compounded interest, or "time value of money" on their sides. They probably don't make anywhere near what you make, but they have time that you don't.
Consider this:
$1000 invested ONE TIME equals the following in 50 YEARS
5% annual interest 10% annual interest 15% annual interest
$11,467 $117,391 $1,083,657
So you're better off starting earlier and getting lower returns than waiting and hoping for a higher interest amount.
This is my message to you - get thee to a financial planner and/or CPA immediately and get started. Every year that you put it off the harder you're making it for yourself.
I know 30 is the new 20, you're delaying marriage and parenthood, focusing on your career, living it up, blah, blah, blah. Well guess what, you'll be 60 someday too and if you aren't already saving, you're behind.
People in their teens and 20's have the power of compounded interest, or "time value of money" on their sides. They probably don't make anywhere near what you make, but they have time that you don't.
Consider this:
$1000 invested ONE TIME equals the following in 50 YEARS
5% annual interest 10% annual interest 15% annual interest
$11,467 $117,391 $1,083,657
So you're better off starting earlier and getting lower returns than waiting and hoping for a higher interest amount.
This is my message to you - get thee to a financial planner and/or CPA immediately and get started. Every year that you put it off the harder you're making it for yourself.
If you are working and your employer offers a 401 (k) you need to be in it...it is a forced savings...the money comes out of your check even before you see it and if you employer offers a match on the funds...take all they are matching...this is FREE MONEY...i have heard many of my younger clients tell me that they didn't bother to get into the 40l (k) because they didn't think they were going to be there that long and then its a few years later and they are still there and haven't put in a dime and have LOST all of that FREE MONEY...so even if you think your only going to be there a very short time...SIGN UP ITS FREE MONEY...and there is nothing better than FREE MONEY...jcb
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This is a pretty difficult one for me to comment on because I didn't have to save for 50 year or even 30 years to retire. I "retired" or in other words, became economically independent when I was 28 years old. I now do the things I always wanted to do in retirement and I didn't even have to use a 401(k) or IRA to do it.
I do not say these things to brag but to make the point that you don't have to take several decades to accomplish what can be done right now. I agree with Kristin that you probably don't want to delay because that will just keep you working and living paycheck to paycheck for more years to come. You can't change the past and you can't really control the future but you can act now. As long as you think in terms of "someday", you might as well say "never." Like Kristin said, get to a professional today.
Even if you are financially independent, you should still take advantage of tax shelters...so talk to a professional!
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