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3 Reasons to Start Saving for Retirement in Your 20s


When you’re just getting started in a career, retirement sounds like a fantasy. However, you will soon see it approaching much faster than you expected. If you aren’t prepared for it, you won’t be able to retire as young or as comfortably as you would like. You should start saving for your retirement as soon as you hit the work force. Here are three reasons why.

You’re Establishing Habits

Building your retirement savings into your budget when you are young (and probably at the lowest salary you’ll ever have) makes it easier to keep yourself on track in the future. You will quickly find that you don’t even miss the money you hold out for an IRA, 401(k), or other investment strategy, and you’ll build your lifestyle on an income level that represents that money already being set aside. As your income grows, you’ll continue to set aside the same percentage, accelerating the growth of your nest egg.

Compounding Interest

The most compelling reason to save early is the ability of your money to grow exponentially with that early start. If you have student loans or a credit card, you know how the interest can pile up against you. Starting early with your savings allows that interest to build up in your favor. A dollar that you save now gets interest now, and that interest gets interest, and on and on. The snowball effect is very beneficial for your financial health.

There Is Time to Adjust

Some people worry about the security of their investments. They see news reports of adjustments in the markets and think that their money is in danger. While it’s true that short-term losses can occur, stocks and mutual funds have always proven stable in the long term. The important thing is never to panic and sell when prices drop, and to invest early enough that your holdings have time to bounce back before you need to liquidate. Of course, you don’t want to make these decisions alone. Count on Financial Advisor Services to guide you in building a long-term plan. Building a solid retirement is all about maximizing the growth of your money, and whether you’re talking about money or plants, more time means more growth. Get started on your investments early in your career so that you can take advantage of all the benefits that time provides in building a solid, reliable financial future for your retirement.

Emma Sturgis is a freelance writer based out of Boston, MA. She writes most often on health and education. When not writing, she enjoys reading and watching film noir. Say hi on Twitter @EmmaSturgis2

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