| What Age Should I Start Saving For Retirement? |
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By Unknown Ask this question to 50 different people and you will receive 50 very different answers. The fact of the matter is there is no right age to start. But don’t worry knowledge is power!"The second you earn income, you should put something aside for retirement," said Matthew Tuttle, president of Tuttle Retirement Solutions in Stamford, Conn. "You should start as early as possible. Make saving automatic. Instead of waiting until April 15 to contribute to your IRA, have a set amount deducted automatically from your paycheck each month." If you are 25 years old, you might not think it matters much whether you start saving now or next year. But by the time you reach retirement age, the cost of procrastination can be huge. For example, a 25-year-old person who sets aside $2,000 per year in an IRA and earns a 7% return will hypothetically build a nest egg of $427,219 by age 65. But if this same person delays starting the program by just one year, it will be worth about $30,000 less. The cost of one year’s procrastination is $30,000 less money to enjoy all through retirement. According to the Bureau of Statistics, today’s average person who reaches retirement age can expect to live to age 86, and life expectancies keep increasing for each generation. So, by procrastinating now, you possibly risk reducing your standard of living for the last 25-30 years of your life. In a retirement plan, money can compound on a tax-deferred basis, without any current income tax consequences. That’s the best tax situation for socking money away long-term.
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