Finance Quick Answers
When do I begin saving for retirement?
Now! The sooner you begin saving, the more your money can grow because of compounding interest and deferral of taxes. It's never too late to start, but the sooner you begin, the better chance you'll have of meeting your retirement goals.
For example, Tom invests $2,000 per year for nine
years beginning at the age of 22 at 9% interest. After
that time, he invests no more. When he retires at age
65, he has $579,471. Harry, on the other hand, does not
begin investing until the age of 31. For the next 35
years, he invests $2,000 per year. At the age of 65, he
only has $470,249.
Obviously, you can see the effect of starting to save
early for retirement. However, don't despair if you were
not an early saver. Begin today, at whatever age, to
plan for your retirement needs.
Dr. Joyce Cavanagh, Former Assistant Professor and State Specialist, Consumer and Family Economics
Last update: Tuesday, July 22, 2008