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Money Minute
Quick Tips
Start Saving Young
Money Minute
It’s never too early to plan your retirement.
 

Most people in their 20s and 30s aren’t thinking about retirement. Instead, they are focused on paying down student debt or saving for a home. While loan obligations are hardly a choice and saving for a home is an important financial goal, regularly setting aside money for retirement is also necessary.

Most people don’t grasp the concept that it’s TIME IN the market, not TIMING the market that’s key. For many investors, it’s about making regular contributions and giving that money the opportunity to take advantage of compounding. Young people have a particular advantage when it comes to investing, as time is on their side. They simply have more years for their money to potentially compound — for interest to possibly be earned on top of interest.

Savings vehicles like 401(k) plans and IRAs make investing convenient and tax-efficient. You’ll need your own nest egg when the time comes to retire (which often isn’t a choice) and you can’t count on Social Security: it’s only designed to cover about 40% of the average worker’s pre-retirement earnings.

Young people would be wise to start saving today. While you may make sacrifices now, you'll thank yourself later.




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