It’s never too early to save
How to save money today so you have peace of mind tomorrow
Young people who do not frequently think about saving money for retirement are unfortunately making a mistake. Saving early allows small investments to earn more interest over time than larger investments made later on:
$35,000 becomes $271,000 with a 35-year investment of $1,000 per year.*
$10,000 becomes $447,880 with a 10-year investment of $1,000 per year.**
Here are the first steps to retirement saving through a Roth IRA or employer plans like the 401k, 403b, or TSP:
- Make wise investment decisions: Work with a financial advisor to manage risk tolerance, asset allocation, and the rebalancing of your savings.
- Evaluate legal implications: Draft a basic will and advance health care directive, and establish power of attorney.
- Organize your financial information: Keep a secure binder of important documents and a list contacts who provide your retirement planning advice.
- Monitor your credit score: Make sure your credit history is correct. Errors could affect your retirement savings.
- Review your objectives annually: Be proactive about your investment portfolio objectives, and adjust them to meet your needs.Remember – timing is essential to maximizing your return on your investment. Just $83 per month can grow exponentially when invested early.To learn more about how to financially plan for other life pivot points, click the links below:
- Financial Planning First Steps
- Planning Ahead for a Loss
- Buying a Home
- Job Transition
- Planning for Retirement
- Birth of a Child or Grandchild
- Understanding 401ks
- Separation or Divorce
- Life Insurance
* Investment of $1,000 per year from age 35 to 65 at 10%.
** Investment of $1,000 per year from age 20 to 30 left to sit until age 65 at 10%.
We randomly selected a 10% rate of return for illustrative purposes only. Past performance of the markets was not considered and the hypothetical rate is not predictive of future results and a 10% rate of return may not be achieved in the future.