This is a repost from last year because I feel the math could be repeated. The excuses I hear for not starting savings are comical: I need to pay off my credit cards first, I'll wait until I get married, I have student loans to pay off, and my all-time favorite, I'll wait until I have more money. Don't make excuses. You need to plan for retirement as early as possible. Consider the following information on what you need to save (based on starting age) to have a million by age 65. For simplicity, I assume an 8% return. Age 20 $200 mo.
Age 30 $450 mo.
Age 40 $1055 mo.
Age 50 $2850 mo.
The cost of waiting is just too high! Einstein once said, “Compound interest is the eighth wonder of the world". You can see in the above table we only get that 30 or 40 years of compounding once. Don't just make the assumption that a million is enough either. Inflation of 3% a year will cut the dollars purchasing power in half over 25 years. My twenty and thirty something’s' readers should consider a much higher savings goal. In other words 25 years from now you guys will need two million to have the purchasing power one million has today. SAVE! SAVE! SAVE! Finwiz.
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