Retirement Planning: How Early Should You Start?

Retirement might seem like a distant milestone in your 20s and even in your 30s or 40s – you're focused on life now, like your career, family, and more immediate financial goals. It becomes easy to put retirement planning on life's back burner.

But by doing so, you're making setting yourself up for future financial success more challenging. The earlier you start planning for retirement, the better off you'll be. Instead of asking, "How early should I start planning for retirement?" ask, "How soon can I begin?"

Let's dive into retirement planning and why the time to get started is now.

Compounding

In support of your future goals, you can leverage the power of compounding and time, to amplify the growth opportunity of your assets. Compounding means you continually earn not only on your initial principal invested, but also on any gains accumulated over time. Therefore, more time can mean more compounding, and thus more growth that can be achieved.

The sooner you start planning and saving for retirement, the more time you allow your assets to grow and realize the benefits of compounding.

Employer Contributions

Does your employer offer a retirement savings plan, like a 401(k) plan with matching contributions? If you're not taking advantage of the matching contribution, you're leaving money on the table.

While experts generally recommend contributing 10-15% of your paycheck to a retirement plan, that percentage may be out of reach for some. If that's the case for you, focus on contributing the amount that will get the full contributing match from your employer.

Doing so is an easy way to start building your retirement savings – you can always increase your contribution as your circumstances change. The important thing is to start having your contributions matched as soon as possible.

Evolving Goals

Speaking of changing circumstances, your retirement goals and current situation may evolve as time goes on. By saving for retirement now, you give yourself greater flexibility.

For example, you may consider a career change in a few years. A solid foundation can give you the confidence to pursue that, as you won't be sacrificing your long-term financial security.

Retirement strategies can be ever-changing, evolving as your needs do. Some months or years, you may be in a place to contribute more; other times, you may need to pull back. That's normal and another reason why it's essential to start planning for your future today.

Starting Later in Life?

There's still plenty of time to meet your retirement goals, especially if you choose to work with financial advisors and develop a comprehensive savings strategy.

You'll indeed need to save more each year if you start in your 40s than you would in your 20s, but it is still possible to comfortably retire by age 65, depending on your goals.

Save for Your Future With Help From Shared Vision Wealth Group

When to start saving isn't the only question that comes up when thinking about retirement. How much money will you need to live the life you've imagined? What age are you hoping to retire? How much money must you save each year to meet these goals? These are all important questions that the professionals here at Shared Vision Wealth Group can help answer.

We'll guide you through retirement planning after learning all about your goals and can set you up for future financial success. Remember, getting started as soon as possible is the most critical step you can take. So, reach out to our retirement planning experts today!

*Reinvesting dividends does not ensure a profit or guarantee against loss in a declining market. Keep in mind that investing involves risk and the value of your investment will fluctuate over time.