Why should you start saving for retirement as early as possible? Is it recommended to start saving for retirement when you are still in your 20s? One of the most common excuses of young adults nowadays if they refuse to plan for their retirement in their 20s is that they are still so far from the retirement age that they don’t feel it to be real.
But if you asked someone that’s nearing retirement age, they would say that years surely slip by. Therefore, it will be difficult to start late if you are planning to have a comfortable retirement. More importantly, as you age, you will acquire more expenses like when you are starting a family and some mortgage.
Starting To Plan Retirement As Early As Possible
As you are starting your career, you may not earn much from it. But one thing you have that older folks do not is time. With time on your side, you can surely save a good amount of cash upon your retirement. There’s a possibility that you are still paying for your student loan but even a small amount that goes into your savings will make a difference.
Knowing Your Goals
The sooner, the better – as they say, the sooner you plan for your retirement, the better it is for you even if you are still in your 20s. If you are not very comfortable with the topic or do not have enough knowledge to answer all your unanswered questions, you can ask a financial consultant or your financial software from IRESS which will help you budget your income comfortably.
One of the best reasons why you should start early in planning for your retirement is because of compound interest. It is the number of funds that grows automatically because of the interest that builds over time.
Setting Realistic Goals
When it comes to saving money, you have to make sure that you are setting realistic goals and you have all the information you need to meet the goals that you have set. You will gain even more savings if you invest your money in the stock market or any other type of profitable investment.
If you are thinking that time is on your side, therefore, you don’t need to start early, then don’t get disappointed if time slips by without you noticing it. You should think of your future ahead of time because there are still so many instances in life where your budget might get interrupted over unplanned expenses. And if you start a family, the expenses will be doubled especially if you have a couple of children to support. Sending them to school will also be a huge challenge.
There are companies that offer employer-based advantage plans. If your company offers this, don’t hesitate to take advantage of it. Some employers tend to match your contributions and this will give extra benefits to you as it will help boost your savings. And since it will be a pre-tax deduction, you will never even notice that your money has been deducted for your retirement. If you are doubtful of the amount that’s being deducted from you, check on some finance software from IRESS, it will surely guide you well.