How soon to start saving for retirement?

Question

I'm currently 21 years old. I was told a while back about a plan to start saving when you're 25 (or about that) and save one million dollars by the time you retire. What age are you supposed to start? How much are you supposed to save? Should I be saving for retirement already at 21?

Answer 1

The sooner you start the less you need to save. Most young adults have other important uses for money like paying for college or getting a first home. If you put away 4,000 in a ROTH IRA it will grow tax free forever. Figure the compound interest on that invested at 8% a year and you will have a nice start to a good retirement. Also a million isn't enough to retire in 40 years. It would only give you about 40K per year and inflation may make that not too much money so aim high and if you have too much saved at 50 you can retire early or stop saving.

Answer 2

Don't wait, start now (even if you are 21 years old). How much would be enough really depends on what kind of life style you want after you retired. But do start to save NOW. Find a high interest rate savings account at a bank now, than when you have enough minimum balance requirement (every bank varies, but some only require $1,000 to open one) to meet the Certification Deposit account open one. Because CD accounts pay much higher interest rates than savings. But if you are already work full time with 401K retirement plan, definitely try to max out. That means to contribute as much as they allow you too. Most company also will match your contributions up to 50%. For example, if you put (contribute) $100 to own 401K account, the company match from 2% to 50% (depends on the company's set percentage). If your company match 2%, they put $2 to your 401Kaccount, if they match up to 50%, they will put $50 dollars to your 401K account. If your campany don't match anything at all (yes, there are companies out there don't match any 401K contribution), you SHOULD still open one, because the money you put in your 401K account is pretax, which will also help lower your tax bracket. Bottom line is, you pay less income tax.

Answer 3

Yesterday is the best time to begin.

The more you save now the more comfortable you will be at the end of the day.

As with all of us you will come into hard times where retirement is the last thing that you can afford to save for. By starting now you will not feel as pressured if you don't fire a few pennys in the bank for a couple of years.

Answer 4

If you have enough income to pay for insurance or benefits, 21 is a good age. If you only have enough then I do not suggest that at all. The benefits of saving up is you have less premiums to worry about because it will be divided on the years it take for the investment to mature (thats until you retire). The older you get, the more expensive it becomes.

Answer 5

You will get so many different, confusing, replies!
Here is the simple advice given by the financial advisers:

You should start by paying into a recognized pension fund a sum equal to half your age in years. So, if you start at age 21, you should pay 10.5%. Many employers will match what you pay in and in that case, 5.25% from you will be enough.

You should keep that %age constant all your working life, increasing the amount as you get pay rises from time to time.

You can readily see that the earlier you start the cheaper it is. If you postpone it to age 30 say, you will have to pay in 15% of your salary, which is considerably more expensive.
Good luck young lady. You have a good head on your shoulders.

Answer 6

Start NOW. The whole ball-game is "the magic of compounding interest." The longer money is saved and built up, the more it is able to grow exponentially at a key point in the future. There isn't much interest, for example, on 15k, but the faster you can get to say 85k, then the interest on 85k is huge compared to what you were getting way back when you were 21. START NOW.

Answer 7

Start saving now! The earlier the better. If you work for a company that has a 401K plan, put as much as you can afford in it. If not, open a Roth IRA.

Answer 8

The earlier you can start, the better. As soon as you can afford it start a 401k and have your employer deposit 5% (or more) of your income into it. 401ks can have different funds within them to put the money into. Look at which ones are available and ask around to see which are the best bets.

Answer 9

'The sooner the better even if just a few dollars a paycheck-it adds up fast and when you feel u have enough invest and talk to financial advisors.

Answer 10

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