What does your typical day in retirement look like? Spending more time with family and friends, volunteering, traveling, or pursuing your favorite hobbies? Whatever your goals, the sooner you start to build your nest egg, the greater the likelihood that your retirement dreams can become a reality.
While we can all understand why it makes sense to start saving early for retirement, in reality it's sometimes easier said than done. That's because there are always more pressing financial priorities, such as saving for a home, putting aside money for a child's education, or taking a much needed vacation.
But starting early and maintaining a disciplined approach to saving for retirement is one of the most important factors in achieving financial security after you leave the workforce. That's because your savings will have more time to reap the benefits of compounding. This is demonstrated in the following hypothetical example:
- Investor A saves $2,000 annually for 10 years-a total of $20,000-and then stops saving for the next 20 years. The value of her account at the end of 30 years is $145,845.
- Investor B waits for 10 years and then saves $2,000 annually for the next 20 years-a total of $40,000. Despite saving twice as much, the value of his account after 30 years is only $98,845.
Assets May Grow Faster if You Start Saving Early
Get Started Today
A secure retirement is largely in your hands! Many employers make it easy to put aside money for retirement through company-sponsored plans, such as 401(k). If you don't already participate in such a plan, start today. As an added bonus, some employers will match part of your contributions. Also consider an automatic investment program, whereby every month or quarter a set amount of money is transferred from your bank checking account into a mutual fund. It's a simple way to save for your retirement. For additional information, contact your financial professional or call 800-MAINSTAY (624-6782).