You Are One Of Just A Few People Who Have The Foresight To Think About Retirement This Early In Life

Category: Finance, Financial Planning.

Perhaps it is looking toward the future in terms of insurance, planning for college and other issues such as this also gets your mind moving on how you will be ready when retirement gets here. Retirement planning experts tell us that if young people in their twenties or even teens can start putting a little bit back toward retirement, the rewards when they reach their golden years will be phenomenal.

But if we were able to step back above our lives, the best time to start preparing for retirement is not the middle age years. If a youth in his early twenties or teens were to just put one percent of what they make back, and that money stayed in some form of investment vehicle that would grow into a retirement account, the growth between the time of investment and retirement at 60 or 65 can be explosive even at a modest interest rate. That is a time when the transition from teen years to family life is pretty all consuming. Unfortunately, few young people are looking that far ahead when they are in their early adult lives. So it might be the responsibility of parents and older advisors to help youth see the value of starting to work on their retirement savings well in advance so they have a well developed program when their retirement years come along. Now, in the last decade, many businesses have eliminated retirement benefits where the company pays for the retirement. One of the best places for a young person to start their retirement program is with the 401k or retirement benefits at their job.

But if the young person works for a company that offers 401K, they can set aside a percentage of their income and it will be put into a retirement fund before taxes. The outcome is a healthy and rapidly growing fund that starts out with an immediate doubling of the invested funds and then grows steadily over the years as more is put into the fund with each paycheck. Moreover, often the company will match the funds up to dollar for dollar and the company will manage the investment of the funds as well. The young worker gets used to the retirement money coming out so they adjust their budget to live without it. If you are a young person and you are considering if you might think about starting a retirement account, congratulations. And without giving retirement much more thought than that, within a few decades, the 401K can evolve into a very impressive retirement account to be sure. You are one of just a few people who have the foresight to think about retirement this early in life.

Because if you only put a little bit back, that can grow and grow and grow and become a sizeable retirement nest egg for you and your spouse even if he or she is the spouse off in your future. And by starting now, you take advantage of the thing that is your greatest asset is time.