When to start saving for retirement is a major question that must be answered by Millennials as they reach their prime earning years. For many, their 20’s are spent establishing themselves and finding a career which is not a conducive to high levels of saving. However, that makes a person’s 30’s the perfect time to start serious planning. Using an IRA, and other vehicles such as the 401(k), is the most popular method as it is well understood and comparatively easy to set up. In addition, if contributions to a plan start at age 30 it might only require a monthly outlay of $263 to reach a million dollar nest egg by retirement assuming a %10 average annual return. However, that number nearly doubles for every 5 extra years that saving is put off. If that is not bad enough, waiting till a later age will likely lower the annual return on investments since a higher portion of savings are usually shifted to safer but lower returning assets which will result in even higher monthly contributions to reach the goal. While circumstances are different for each individual, starting early is the best strategy for those seeking additional financial security in old age.
See Chuck Saletta, How to Plan for Retirement in Your 30s, My San Antonio, April 10, 2016.
