When's the best time to start planning/saving for retirement.??

joyfulguyFebruary 25, 2007

The day that you're born ... well, it would have to be our parents doing it for several of those early years.

But even then, daily/weekly/monthly/annually the increment of steepness of the hill (mountain?) that one must climb to achieve one's goal in terms of the size of a fund needed to provide for a comfortable retirement increases only very slightly - even infinitessimally for a number of years.

But - if the steepness increases daily only slightly for a number of years, it does get steeper, every day.

As one defers beginning to fund it, the amount that one must invest over any given period increases at first slowly, later substantially ... or one must seek a higher rate of return (often involving increased risk) ... or tax advantaged rates of return or growth ... in order to enable one to achieve that goal.

There's risk associated with delaying starting the plan, as well.

Some feel that delaying a year won't "cost" much - just the $300.00, or $1,000. or whatever amount that one planned to invest.

But if one gets the same rate of growth, plus same invested amount, etc. throughout ... what one actually did was to lose the value of the last year's growth - for that one year's investent was never made ... and in many cases, the growth that would have developed in that last year turns out to have been substantial! So - the cost of a slight delay can turn out to be substantial, in the end.

For example, if one young person invests, say $1,000.00, annually from age 20 to 30 (10 years - $10,000. total) and never invests another cent, and another investor starts at age 30 and invests the same amount annually until 60 or 65 (30 or 35 years, $30,000.00/$35,000.00 total), in many cases the amount in the first person's account at age 60/65 will be larger than that in the second person's.

May I suggest that you purchase a financial calculator, cost maybe $35.00 - if you make any use of it at all throughout your money management operations through the years of your life ... it will pay for itself many times over.

Recently read an article in what I consider the best money management magazine around written by a young guy who retired at age 34.

Now - he does what suits him ... whenever it suits him to do it.

No more of this scraping the ice off of the windshield in the dark of a winter morning, preparing to go to work ...

... and driving home in the dark, after work.

Enjoy your week - and your retirement planning.

Best time to start, if you haven't already - is right now.

Delay is ... costly!

ole joyful

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Chemocurl zn5b/6a Indiana

Great post!

Wish I had met you years ago!....but luckily I ended up just fine (secure and comfortable), and retiring early (48) anyway.....could have been earlier, more secure, and more comfortable I guess.

Now if I could just retire from this little bit of housework I quit putting off, I'd really have it made.

Sue...who would rather play on the computer than 'work'

    Bookmark   February 28, 2007 at 2:54PM
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alphacat

Just remember -- work takes time to pay off, but procrastination pays off immediately!

    Bookmark   March 5, 2007 at 3:07PM
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budster

From your first paycheck. All those missed pizzas and dinners out will pay off when retirement comes. You don't have to live like a hermit to reap big benefits in the long run. Save (anyway you like) but save now for playtime later on. Budster

    Bookmark   March 5, 2007 at 9:51PM
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joyfulguy

As I said in another post on here the other day, quoting a sign that I saw somewhere,

"Maturity is ... delayed gratification".

ole joyful

    Bookmark   March 7, 2007 at 11:06AM
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