TODAY is the Day to Start Saving for Retirement | brokeGIRLrich
Compound interest is pretty much a miracle. Albert Einstein called it the eighth wonder of the world.
But if you read a lot of personal finance blogs, they’re all yelling at 20-somethings to open retirement accounts and using math formulas to show all the amazing compound interest you’ll save up by barely putting in anything.
This is awesome if you’re 20. Yes, open that account! Get on it.
But if you’re 35, 45 or even 55 – don’t despair!
Compound interest is still your friend!
Forget about those sites, since they’ll probably just get you down that you can’t turn back time. Heck, I did open an IRA pretty early and I still read those posts and kick myself for not opening one the day after I was born.
It’s never too late to fix the road your own and compound interest is still really freaking impressive.
If you to make big money achievements, sometimes you have to stop letting what you haven’t done loom like an elephant in the room and just start moving.
In a 10 year time frame, you save $500 at an annual rate of 8% compounded monthly, after 10 years, you’d have $1109.82. Without compound interest, you’d have $900. That extra $209.82 comes from the monthly compounding.
And that’s if you didn’t even put in another penny.
If you put in $500 a month at an annual rate of 8% with the interest compounding monthly for 10 years, you’d have $92,582.84.
If you just put that money aside, you’d only have $60,000.
If you put it in your average high interest savings account, which yield a whopping 1%, you’d have $63,627.50.
So if you can buckle down at any age over 10 years, you can still start a decent retirement nest egg.
People think I’m crazy that I’m already putting money towards retirement and I’m only 36!
I only wish I had have started 10 years ago! The great news is, like you said, even if you missed the early start, you can still achieve great things.
I intend to retire at age 55 in only 19 years, with a lifestyle that’s even better than the lifestyle Mrs Ikonz and I currently enjoy.
Mr Ikonz @ ProjectIkonz recently posted…A trip to Disneyland from Australia for only $200
Awesome! If you start crunching numbers and are dedicated to your goals, financial independence becomes so much more achievable than it initially seems!
I’ll be 30 in a few months and just started putting away money for my retirement. Do people really think it’s too early to start saving in your mid 30’s?
Justin recently posted…Stock Market 101: How Does it Work?
I don’t think they think it’s too early – I think a lot of posts make people feel like it’s too late. It’s definitely never too early!
Yes! The best time to start is right now. Even if you just have a little bit of money, that’s better than nothing. Everyone has to start somewhere 🙂
Great post!
Michelle recently posted…How To Make Money While RVing
So true! And it’s never too late. Don’t get sucked into giving up already if you’re just starting in your 30’s and 40’s and keep coming across articles telling you it’s hopeless unless you start in your 20’s. LIES!
great reminder, I often get discouraged and pour a lot in to real estate and P2P lending and neglect my market portfolio. It really is amazing, and often beyond our comprehension
steve recently posted…The Venerable Benefits of Peeing Outside: A Back to Basics Approach
I like this post, its small and to the point. Yes I opened my IRA at 19, and I never saw investing as something scary or too risky. I took my chances. During my early 20s I wish I bought more individual stocks, but it is what it is, can’t change the past. I have mutual funds mostly, and now building other passive investments in my 30s. Good luck
EL @ Moneywatch101 recently posted…Car Dealer Shenanigans
This is freaking encouraging. Now that I’m out of my early 20s, this perspective is much appreciated!
Femme Frugality recently posted…Free Travel Through Credit Cards? Ask this first.
It’s nice to know that someone is acknowledging that there is a market out there with older people that have yet to start regularly saving for retirement.
Miranda recently posted…What Does Affordable Mean to You?