• UEFA Team

When To Start Saving for Retirement


When To Start Saving For Retirement

When you start talking about saving for retirement, have you ever noticed that neither money nor age are the first things to come up? Actually, money and age aren’t anywhere in the picture. Go ahead, ask someone, anyone, about when they think is the best time to start saving for retirement and see what kind of answers you get. The older generations wish they started saving sooner while the younger generations figure they have plenty of time to start.

Time is apparently the commodity in abundance or severe lack, but either way, it turns out that time is of the essence. What exactly does this mean? I am glad you asked. Let’s take a good look at when is the best time to start saving for retirement.

Younger is better

The younger you are when you start investing, the more money you will have gaining interest over a longer period of time. This will help out in the long run, due to the magic of compounding interest. Sure, having a bigger bank account would be great and going out with friends on the weekends is a lot of fun, but putting a chunk of your earnings away will reward you a hundred-fold in fifty years.

Older has an advantage

Sure, $15,000 compounding over fifty years sounds appealing, but why not wait until you get that big promotion before you start saving? After all, your company is matching your contributions dollar for dollar right now. Not only that, but it is much easier to max out all of your retirement accounts each year now, versus when you were young.

No better time

The solid facts are, no matter if you are 25 or 55, there is no time like the present. One of the big debates is that a person who can put away $1,000 a month when they are 18 will be much better off than someone who waits until they are 28 to start saving. This debate doesn’t make much sense because not too many 18 year olds have $1,000 a month to start stashing away for a rainy day. When you are older, funds are typically more readily available.

While putting money away at 18 would be fantastic, there are limited options available for retirement planning. Not many younger people are working in a career with the benefits of company retirement programs such as stock options, 401(k) and the entire fund matching incentive. You see, the 18 year old has to put all $1,000 in the account himself or herself while the adult working in the corporate world with benefits like this only has to put $500 and the company will match.

Compounding interest is not a force to be taken lightly. Think about the old adage; ‘which would you rather have, a million dollars today or a penny doubled every day for a month?’ Do the calculations yourself if needed, but I can tell you compounded interest is the answer.

There are benefits to starting at both ends of the spectrum, but why wait for another day? Go ahead and take advantage of as many of the positives you can and start saving for retirement today. After all, it is only the rest of your life we are talking about.


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