Road Map to Retirement: Your Retirement Savings Options

College is a place for research, theories, concepts and ideas. Young professionals, however, are quickly thrust into the real world which functions based on actions and concrete results. I have worked with a number of extremely intelligent and educated individuals who have not implemented good planning and taking action regarding personal finances, and unfortunately, are reaping the consequences of that lack of planning.

Start Saving NOW

retirement savingsMany 20-somethings live on the financial edge; but hopefully this article will motivate you to take whatever steps are necessary in your personal finances to start saving for retirement now, rather than later!

There is also good news if you’re in your twenties: time is on your side! If you get your act together now, you can achieve financial independence decades ahead of your peers who keep muddling along living from paycheck to paycheck.


The Cost of Waiting to Invest

cost of investingTo many, investing seems like a challenging or overwhelming endeavor. It often requires sacrifice, focus and discipline. In order to avoid these unpleasant aspects, many young people convince themselves that they can start investing “later”, when they have a higher income.

What many people don’t realize is that the earlier you start putting money away, the less you’ll need to contribute. By investing consistently when you are young, you will allow the process of compounding to work to your advantage. The amount that you invest will grow substantially over time as you earn interest, receive dividends and share values appreciate. The longer your money is at work, the wealthier you will be in the future and at the lowest possible cost to you.

The Power of Compounding

calculator retirementIf you put $4,000 a year into retirement accounts starting at 22, you can have $1 million by age 62, assuming 8% average annual returns. Wait 10 years, until you’re 32, to start contributing, and you’d have to put in more than twice as much—$8,800 a year—to reach the same goal. That’s the power of compounding over time!




Saving and investing every dime you can now will give you flexibility when you’re older, either to retire early or to cut back your retirement contributions so you can cover other expenses like helping with college education expenses for your future children.

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