Save for Retirement – Early is Better than Late
Save for Retirement – Early is Better than Late
We all should plan for our retirement. The worst thing that can happen is to reach an age where you don’t want to work anymore, and not be able to quit because you don’t have the money saved to do so.
Most of us start saving retirement in small amounts when we first go to work, and then in larger amounts as we get older. This method works, but doing it the other way around works even better.
If money is put aside for retirement in larger amounts at a younger age, then the interest compounding grows the accounts to much greater sums. ***
As an example, if you put aside $2,000 per year starting at age 20, and the money returns 6%, then the money available at 65 would be $425,500. If you wait until you are 25 and make the same investment for 40 years the balance will be $309,500. The additional $10,000 invested early increases your retirement fund by $115,000.
As a matter of fact if you only invested from the time you were 20 years old to age 35, and stopped, you would have $314,000. This is more than the accumulation if you wait until age 25 to start and invest for 40 years.
But suppose you can get a better return than 6%? If you invested $2,000 per year starting at age 20 and up to age 65, and managed a 10% return, then you would accumulate $1,438,000. If you wait until age 25 and invest for 40 years you will only have $885,000.
In the instance of a 10% return if you only invested from age 20 to age 30 and stopped, you would have $927,000. All for a total investment of $20,000!
If you are young and working, it is wise to invest as much as possible in a retirement fund and leave it alone. Even if you stop investing later you will be better off than if you wait to make your investments.
We hope you found this article about “Save for Retirement – Early is Better than Late” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Could You Pay More to Drink Soda in Berkeley?
Could You Pay More to Drink Soda in Berkeley? We all know that obesity is a problem in our country. Activists and other interested parties continue to work on ways to help curb this growing problem. Indeed, obesity is neither good for individuals or for our country. However, would creating a new tax to help…
What Happened to California’s Tax Revenue in May?
Where has all of California’s money gone? Ok, so the state isn’t bankrupt or anything like that, but according to recent reports, the state’s tax revenues fell short by 5.5 percent in the month of May. That marks the first time in six months that California’s revenues have not reached expectations. In fact, that 5.5…
Beware the Pump: Another Gas Tax Is on the Way
If you’ve had enough with California’s high gas prices, then you might not want to keep reading, because just when you thought things couldn’t get any worse, they are about to. That’s because when 2015 rolls around California residents are going to have to pay another new gas tax. In fact it’s a double-digit hike…
Try These Five Tips For Tax Savings in 2014
Everyone loves to save on their taxes, especially since it seems like the government never runs out of ways to add to American’s tax bill. So let’s discuss some helpful tips to reduce your tax bill. Although it might be too late to implement these ideas for last year’s return – unless you file an…