Why Save Early for Retirement
Media Credit: Bank of America
Sound Familiar ?
You’re a solid 6 months out of college, you’ve landed a nice entry level job with a decent starting salary, and things are going great. Still living in mom and pop’s basement, you start saving your dough so you can move into a yuppie neighborhood with the rest of your friends.
While working for the weekends, the idea of retirement is the last thing you ever want to think about. It feels great to spend your money on beer, food, and girls; but you should continue to do so with a bit of responsibility. I don’t want to be the one to lecture you, that’s your parent’s job. However, I will leave you with a quick video from Bank of America that will show you the major benefit of taking a little bit of that bi-weekly paycheck, and putting it towards your retirement.
Small, Slow, Steady
Saving hundreds of dollars per month is hard with the cost of living and paying back those student loans you love so much. However, saving small amounts of money each and every month consistently can lead to a nice chunk of change down the line. Start small and watch your savings slowly grow each month.
Time is Your Friend
Saving $10/week sounds silly, but think about it. Investing your money into an IRA or 401K with a return of any percentage is better than nothing at all. Depositing money towards retirement is tax deductible and will pay off in the long run.
You do the math: $10/week for 520 weeks (10 years) adds up when you consider interest rates. Of course, some years might not be as profitable than others; heck you might even lose money. But assuming a conservative interest rate of 7% (Bank of America) you will earn more than simply keeping your money sitting in your debit account. Fast forward ten years with the 7% interest on your consistent $10 deposit, you earn an additional $2500 for simply wiring money towards another savings account.
Your money builds on top of itself. When you start to invest in your future early, it pays off later. As you continue to add funds to your savings, the money will collect interest on top of the principal and continue to grow as you grow older.
– That Stud, AT