We’re all familiar with the old saying “a penny saved is a penny earned.” Retirement may seem far away but the sooner you start saving your pennies, the more your savings can grow.
Beginning to save for retirement as early as possible is vital and can dramatically increase the amount you accumulate for your golden years. Saving successfully doesn’t require setting aside a lot of money but it helps to be consistent over the years. The amount you contribute to a 401K or Investment Retirement Account will accrue interest that increases your earnings in the long run.
Consider, a Roth IRA allows you to contribute up to $5,000 per year after taxes. You can achieve this goal by setting aside just $96 a week and remember you do not have to contribute the maximum, any amount helps.
Depending on when you start, the outcome could be vastly different*:
• Start at age 25 and by age 70 savings will total around $1,600,000
• Start at age 35 and by age 70 savings will total around $800,000
• Start at age 40 and by age 70 savings will total around $550,00
Starting at age 25 nearly doubles the amount of savings compared to starting ten years later.*
|Click to enlarge graph.|
For more information and news to assist you with money management, join Community Financial Credit Union on Facebook and Twitter.
*These numbers are a hypothetical example that assumes a $5,000 annual IRA contribution made each year for the range shown, an annual rate of return of 7% (This is a little to ambitious; 4-5% is more realistic). and no taxes on any earnings within the IRA. This does not reflect fees or inflations. IRA distributions before age 59 ½ may also be subject to a 10% penalty.
Posted by: Community Financial
Community Financial Members Federal Credit Union is a not-for-profit, full-service financial institution owned and governed by its membership.