hile starting a savings return) towards retirement. By
plan is most effective the age of 67, this monthly
when started early in investment will have grown to
life, this is the time people are over $1,000,000. Suppose that
least interested. It used to be same 22 year old, though, decides
that people would live on 80% to to travel after graduating from
90% of their take-home pay and college or wants to adjust to a
save the remaining 10% to 20%. new career and waits until the
Now, according to the federal age of 25 to start investing the
survey of consumer finances, it same $100 per month. By
is not uncommon for people to be retirement, this investment will
living on 120% of their have grown to only about
discretionary income! I have $780,000. Finally, waiting until
talked with many people who say the age of 30, maybe until after
they will start saving next year, starting a family or buying a
or after they buy a new car, or home, this $100 per month
when they are able to earn more investment will have only grown
money. Yet as the savings rate to about $470,000 by retirement.
across America has continued to Waiting just 8 years to start
drop, this time to start saving saving could cut the amount of
seems to keep being pushed back. money you have at retirement by
This procrastination and waiting more than half!
can be costlier than most people
realize. Time is Money
The Cost of Waiting Let’s look at it a different way.
Suppose you know that you want to
Let’s look at what happens if a have $1,000,000 by retirement at
22 year old starts saving $100 age 67. If you were to start
per month (at a 10% rate of saving at age 22, you would need
to save only $96 per month (at a contribute $500, this small one
10% rate of return). Waiting time investment would grow to
until age 25 to start saving over $350,000 by the time your
would require this monthly child retires at the age of 67
investment to be $129 to reach (assuming a 10% rate of return).
the same $1,000,000. By the time Taking this one step further and
you reach 35 years of age, this making this an annual
monthly investment would need to contribution over 67 years, this
increase to $359 per month. $500 per year ($33,500 over the
Finally, if you did not start course of 67 years) would grow to
saving until the age of 45, you about $4,000,000!
would need to save $1049 per
month to be able to have Hopefully, you can see the
$1,000,000 when you retire at age importance of starting to save
67! The lesson here is that the early. Even a few years of
longer you wait, the more money waiting could cost you hundreds
it will end up costing you to of thousands of dollars. A small
reach the same goal. amount of money, even as little
as $25 per month, saved
How to turn $33,500 into consistently over time can grow
$4,000,000 to more than you realize. The
important thing is to start
Finally, here is something to saving now, because you cannot
think about for your children. If afford to wait.
you were to open an IRA for your
child the year they are born and
About the Author:
Robert Westervelt has been doing financial planning for the past few years with a desire to help people get out of debt and achieve their financial dreams and goals. Most recently he has started a website http://www.easyfinancialplan.com to help families start developing their own personal financial plans.
Read more articles by:
Robert Westervelt
Article Source: www.iSnare.com 
