It’s not nearly as exciting as buying a new car or saving up for your dream vacation, but saving for your retirement is just as important as having reliable transportation or getting away and enjoying time off. In fact, it’s even more important. While everyone has a different financial situation, it’s a great idea to start planning for the future and putting aside as much as possible for retirement. The sooner you can begin a retirement plan, the better off you’ll be down the road.
If you begin early and are able to live within your means, spending less than you make and saving a portion of your earnings each month, there is a good chance you’ll be able to retire earlier than those of your same age that didn’t begin sooner. If you’re still in your 20s and have not begun saving, start now. According to a recent survey from Money Rates, only 27% of people started saving up for retirement in their 20s and most waited until they were in their 30s to start saving.
If you begin saving your money for retirement as early as your 20s, your money will have a lot of time to sit and accrue while in a low-risk retirement account. If you wait until later in life to start a retirement fund, your money will not have as much time to be compounded in interest and therefore you will not have as much at retirement age as someone else that started in their 20s.
Your employer will most likely offer some sort of 401(k) plan for you to take advantage of, which you should definitely consider. Oftentimes, your employer will match your contributions, and you’ll get more money than you would with just your funds alone. Most employer plans will automatically deduct funds from your paycheck, allowing you to not even miss the funds in the first place. Try to contribute as much as possible, the maximum allotment being the best option because the employer matching your contribution is essentially free money.