ASAP!
It is never too early to start saving for your retirement. Albert Einstein said, “Compound interest is the eighth wonder of the world.” The longer you have to save, the less you have to save to arrive at a goal.
A retirement investment example
Let’s give you an example of the power of retirement account investing when it comes to “early and often” as its mantra.
We have two people, Ken and Stacy. Both are success sales people. Both are wide-eyed and energetic. However, both do not share the same investing philosophy.
At 25, each are offered the ability to invest in an IRA account. While Ken passes on the opportunity, Stacy knows that it is the best thing to do. She invests about $460 per month, or the maximum of $5,500 per year.
At 35, we revisit Ken and Stacy. Stacy is still investing her max. Ken, however, decides to start investing.
Fast-forward to watching Ken and Stacy at 65. They are both successful individuals. Both have a family, and extended family. And both are now ready to retire.
We are going to assume two things…
- Ken and Stacy both invested in the same IRA
- The % returned is about 6%
Ken spent $165,000. Ken’s IRA account is now worth about $460,000. Stacy, on the other hand, contributed about $220,000. And her investments are now worth about $900,000!
Stacy only contributed about $55,000 more dollars, but she saw nearly double the value of her account over Ken’s – because she start ten years earlier.
“Early and often” is the best way to go when it comes to retirement accounts and investing.