More often times than not, a lot of people around my age don’t put much emphasis on saving for retirement. Their idea being they have 40+ years to save so why is now so important.

However, if any of you have kept up with your financial news as of late, it’s that a large majority of older workers say they’re never going to have enough money to retire.

“I started saving too early for retirement” said no one ever.

Your Greatest Ally: Time

For young individuals like yourself I hear more silence than talking when it comes to retirement. Why is this? Is it because we focus too much on our needs? Our wants? Our inability to wait and need things in an instant? Whatever it may be, it’s a fatal idea to have. Time is on your side when you are young. The older you get, the harder it becomes to save for retirement.

“Older Millennials — those born in the early 1980s — will need about $1.8 million salted away to maintain their standard of living in retirement while younger Millennials — those born in the late 1990s — will need upwards of $2.5 million, according to various studies, estimates and experts.” — Says Robert Powell in this USA Today article.

Chump change right? I thought so.

Based on historical performance, in order to grow your money through any investments, you need to invest over time. The more time you have, the more likely you will be better off because of compounding interest.

Compound Interestmoney-tree-growing-illustration-small-plant-developing-32182527.jpg

So what is it anyways?

Compounding interest is interest added to principle during one period. Followed by interest added to the previous interest you had already accumulated. For example, if $1,000 earns 10% simple interest over 10 years, the end result is $2,000. If the same amount of money earns compound interest for the same amount of time, the end result is approximately $2,594. This is just one deposit that grew over time. Imagine making consistent monthly or annual deposits and then you can really watch the magic grow.

Just because of this simple factor, even steady modest savings can grow into a sizable nest egg in retirement. Even more so than if you left it under your mattress or in a savings account without compounding interest.

Did I get your attention?


If you start saving $200/month when  you’re 25 years old and do this every month until the age of 60, your money will grow to $406,152 assuming an average rate of return of 7.5%. These returns are not in any way guaranteed however it goes to show a small amount can go a long way.

Lets assume you save the same amount of $200/month but start at the age of 35. Assuming the same variables as last time, your money will grow to $175,452.

Even if  you double your amount at age 35 from $200 to $400, all information staying the same your money will only reach $350,904.

As you can see the value of time is critically important and can have a huge financial impact when it comes to retire.

Saving steadily over time is more powerful than saving more money later in life. Take advantage of that compound interest while you can. There’s no reason not to!

Remember – nobody will care more about your money than you will. Even if you are not enthused by the thought of learning or starting to save for retirement, it’s part of being a responsible adult.

You owe it to your future self who will want to retire someday. It doesn’t have to be overwhelming and there is no better time to start than right now!

You’re not getting any younger you know.

What are you doing to save for retirement now? 

Good Luck, Newbies.

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