Think Retirement When Young
Most young adults do not think about
retirement too much. This is definitely the case with young
teenagers as well. However, it does not change the fact that we
all will grow older and that retirement day will fast approach.
It stands to reason that we are never too young to start
planning for retirement and part of that plan is to start
saving money and getting a good return on the investment of
what is saved.
Just think about it. If a young person starts saving at age
18 and retires at age 65, then that is 47 years of steady
saving. If a person were to save a dollar a day then that in
and of itself would be $17,000+ dollars without even the
consideration of interest. If a person is to save $1 a day for
47 years at a 5% return and a 3.1% inflation rate, that savings
would grow to around $70,000. Thus, you cannot start too young.
In fact the younger you start saving for your retirement, the
better.
Initially, you might want to invest your money into some
investment vehicles that provide high rates of return. These of
course will be the riskier investments, as they tend to return
higher rates. When you are young, it is advisable to do this
because you can bounce back from market downturns with plenty
of time to recover. As you get older and closer to retirement,
you want to protect what you have accumulated and keep the
investments in less-risky vehicles. Of course, you won’t
achieve the high rates of return that you would in the risky
ones but the idea here is to protect yourself from taking
losses close to retirement. Also, make sure that all of your
retirement investments are tax-deferred in that you do not want
taxes to negatively impact you while you are building your
retirement fund.
Other Resources:
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