People who plan early for retirement may have tremendous success when they finally retire.
According to a publication issued by the National Institute on Retirement Security, only one out of three people between 21 and 32 have retirement savings accounts or investments. The problem with this scenario focuses on the historical evidence that savings grow over time. Consequently, saving and investing money at a younger age may make an impressive difference years later.
An Investment Account is a Future Retiree’s Best Friend
Saving money on taxes offers another reason to begin retirement planning efforts at an early age. Adding contributions to an Individual Retirement Account (IRA), Roth IRA, or 401(k) plan means that the person does not need to report income earned on dividends, interest, and capital gains. In other words, investment accounts offer legal tax loopholes for every investor regardless of their position, wealth, or status.
Compound Interest Provides Impressive Gains
Whether a person has a savings account, investment account, or both types of accounts, compound interest and reinvested dividends continue to multiply throughout the years. Allowing funds to grow offers an outstanding solution to having more money when a person retires.
A Nest Egg Provides Tremendous Opportunities
A retiree with a substantial nest egg may have better chances of living their life to the fullest. To illustrate, the individual may have enough money to travel, eat out, go to the theater and enjoy their life. Living in retirement years without an accumulated nest egg may mean struggling to get by because Social Security payments may only offer enough funds to pay for daily necessities.
Every Penny Counts in an Amazing Way
Most people may not realize the value of a penny. Younger persons need to develop habitual saving patterns that add up over the years. One way to experience financial growth is to set up automatic savings or investment plans. A bank or brokerage firm permits account holders to automatically add money from their checking accounts to their savings or investment accounts. Saving money every month via automation offers a painless way to accumulate capital. Making coffee at home and opting to give up overly priced beverages served at a favorite coffeehouse provides additional growth opportunities.
“”Some information on this website was written by BrandYourself, a non-affiliate of Cetera Advisors LLC”