Getting Started
As personal savings become an increasingly important part of Americans' retirement preparations, the most important asset you have available is time. It can be difficult to save money when you're first starting out. You probably have many debts, loans, and expenses, and not a lot of salary with which to pay them off. At the end of the day, your finances might be stretched pretty tight, and it might seem a bit ridiculous to be thinking about retirement this early in your life.
Starting Early
But starting as early as possible, even if you can only put a little money into savings every month, can have a dramatic difference in the future. For example*, let's assume you begin saving money at the age of 25, and at the beginning of each year for the next 20 years, you put away $2,000 toward your retirement. Then you stop saving and just let your money sit until you retire at the age of 65. Assuming a 9% annual investment return, you will have $625,055 by the time you retire.
Cost of Waiting
But if you start saving at the age of 35, even if you still put away the same $2,000 each year for 20 years, and even if you still earn the same average annual 9% return, you will only have $264,030 when you retire at the age of 65. Under these assumptions and conditions, that 10 year delay could cost you $361,025.
From this example, we can see that starting as soon as possible can confer significant advantages further down the road. To explore some of the options First Investors can help you with, click on the submenu options to the left.
* All figures in this example are hypothetical and for illustrative purposes only. They do not represent the performance of any First Investors mutual fund. Actual returns will fluctuate, and you might lose money. Also, this example does not take into the consideration the impact of taxation. After applicable taxes, accumulated values will be less.
