Retirement comes last in life, and it can be tempting to put it last in your list of financial priorities as well. It can all too easy to make this mistake and put off saving for retirement when, after all, there are many major expenses in our lives that we are bound to come up against sooner than we will hit retirement. Tempting as it may be to spend money now instead of later, however, waiting too long to begin your retirement fund can be a huge regret. Here’s a few great reasons why you should start saving now, no matter where you might be in life or how long you plan to wait until retirement.
This is probably the most compelling argument for saving as much as you can as early as you possibly can. Compound interest can essentially earn you the rarest of all things: free money. Any good savings account offers you interest on your contributions, and that interest then becomes part of the balance of your account, so that the next time you receive interest, it is calculated from a larger amount. Because retirement is often years away for many savers, there is a lot of time for that to add up. The interest grows at an exponential rate, meaning that even the difference between starting at age 20 vs age 25 can be a huge amount of money in your pocket a few decades don’t the line. No matter how old you are, saving now instead of next year always means more money for you when it comes time to cash out. If more money isn’t a good argument to start now, we don’t know what is!
If your employer offers any kind of matching program for your retirement savings, then not saving as much as you can now is equivalent to leaving money on the table. If you have a chance for someone else to be contributing to your fund, you should take advantage of it as much as you feasibly can!
Quality of Life
You work hard to achieve a certain quality of life for you and your family, and you come to expect that your hard work pays off — as you should! It can be very difficult for people who have supported themselves for their whole lives to accept a cutback in standard of living right when they should be celebrating a lifetime of achievement. Your retirement should be a time of relaxation and congratulations, a chance to do all the things that you had to put aside in your working years. But to have the retirement you deserve, you will have to have saved sufficient funds to support yourself after work at the level you are accustomed to.
Reach the Finish Line
Another motivation for many to start saving as soon as possible is that the sooner you build up the retirement account, the sooner you can put it to good use! If you want the option of retiring early to enjoy some much-deserved free time before it’s too late, you’ll have to plan ahead and get smart about your goals. And that means saving now, as soon as you can.