For the majority of people in the United States who are 47 or younger, they will never get to see the results of the usual 12-17% of their paycheck towards saving up for Social Security when they retire. The reason they’ll never see the benefits of their hard work is because the Social Security trust fund has been projected to run dry by 2024 in addition to being completely gone in 2036. Thus, if you want some sort of retirement funds, don’t rely on the prospect of Social Security. Instead, start saving up for your retirement at an early age.
Saving early means you can retire earlier, make more when you do retire and have a sense of security in your funds.
Saving Earlier Means Retiring Sooner
I f you’re thirty years old and you deposit $8,000 a year into a retirement account until you’re 50 you will have saved $160,000. And if you invest it wisely, you could have upwards of $1,000,000. This gives you the option of taking full retirement an entire decade earlier. This is much more appealing than working yourself to the bone every day until you are 65. Plus, mature retirement fund accounts may provide something to live on in the event you are unable to work. This would allow you to still take care of yourself until you can find employment.
Making More After You’ve Retired Means Saving Earlier
Now if you chose to start investing in your early 20’s, a deposit of only $4,000 yearly, you could expect have $1 million by the age of retirement also. If held onto properly, these funds could further be made to last for more than 50 years. Investing earlier in a retirement fund may help you avoid being required to save as much if you began later. Starting to invest just 10 years later could mean that you would need to deposit $8,000 each year in order to attain $1 million.
Planning Ahead Means You’re More Secure in the Future
An earlier commitment to investing can help you to recover from setbacks such as a decline in the stock market or even your retirement fund. Remember between 2008 and 2009 several Americans lost a great deal of their savings due to the downfall of the economy. For this reason it’s crucial to invest wisely.
Start Saving Up Today
In order to protect your future, you should start saving up today. It may seem already impossibly hard to just make the bare minimum payments required for day to day living. Cut your costs where you can. Don’t take out too much in the way of debt. If you can, pay the balance of your credit card off before thousands of dollars in interest are accrued. Try to go without using it in the first place. Being able to save money is being able to know when not to toss money out the window.
Remember that saving early makes retirement so much easier. No one else benefits from this except for you. Be smart about retirement and ultimately you’ll be able to reap the benefits sown when you’re much older. Then you can retire and relax without worry.
Financial advisor Andrew Greene is a freelance writer and blogs for debtmanagement.org.uk where you can get debt management services.