Plan Young, Retire Early

If you’re among today’s mid-twenty or early-thirties work set, you may view retirement as being a long way off. That’s true, of course, since you have at least thirty to forty years before the big 65 rolls around. But that doesn’t mean you shouldn’t start saving today. In fact, if you begin to save right now, compound interest will work hard for you, letting you retire on a much larger chunk of change.

Take, for example, two siblings. Erika is 22, a recent graduate, and her brother John, 35, has been working for ten years. Even though she doesn’t make very much, Erika decides to save $200 per month. Her brother John, on the other hand, decided to wait until he was making a comfortable income before beginning his retirement saving. John is surprised to learn that Erika’s $200 monthly investment at a 10% annual return will net her $1.5 million at age 65. John must save $721 per month to have the same $1.5 million at age 65.

Don’t wait for a better-paying job to come, start saving now. It doesn’t matter how little the sum, compound interest will help that money grow and grow over the years. And don’t worry, as you get more experience and make more money, you’ll be able to add more and more to your growing fund, so there’s no reason not to start today.