Everyone looks forward to the day when they can leave work and not have to come back. In order to do that and not struggle, you have to do some retirement planning. The sooner you start, the better off you’ll be.
Compounding Interest Needs Time to Grow
Ideally, you should start saving when you are in your 20s, once you graduate, start working, and earning money. If you start sooner, your savings have more time to grow. The compounding process can generate a tidy sum.
For example, say you start at 25 and put approximately $3,000 into your account each year. Do that for ten years, and by the time you’re 35, you will have $30,000. At this point, you can actually stop saving and allow the compounding process to take over. Assuming a return of eight percent annually, by the time you retire at age 65, your $30,000 has grown to $427,000.
Take a moment to look at the difference 10 years can make. Instead of starting at 25, you wait until 35 to get going on your retirement planning.