Because you still have life to live, retirement is the last thing on your mind. Who wants to consider becoming old and getting gray hair when there are so many experiences and enjoyable things to do? Planning for retirement now can be your best decision. Are you beginning a Gold IRA at age 20? Genius.
The power of compound interest is the reason, to wit. Early retirement savings give you decades for your money to compound and grow. As a result, even modest payments made today can grow into a sizable nest egg.
Let’s quickly calculate. Say you open an IRA at age 20 and make a monthly contribution of just $100. If annual returns average 7%, you will have more than $300,000 in savings by age 65. Suitable for a recurring payment that is likely less than your phone bill.
But what if you start saving when you’re 30? In that case of saving at 30, to reach the same $300,000 goal, you would have to contribute almost twice as much each month. How about putting it off until your 40s or 50s?
It might be challenging to save for retirement when you’re first starting. Prioritizing long-term investments for an IRA may be difficult because of student loan debt, low-paying entry-level jobs, and the temptation of cutting-edge experiences and technology. However, the earlier you begin, the simpler it will be to incorporate retirement saving into your budget and make it a habit.
Starting an IRA at age 20 also has the benefit of flexibility. You can be free to take risks and follow your passions since you can never be sure where life will lead you if you don’t have a good retirement savings strategy, especially for IRA. Who knows, maybe a few years from now, you’ll be enjoying a cocktail on a beach, applauding your 20-year-old self for being so wise.