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Be Wise With Money
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Start Planning for Retirement Now
June 9, 2016
The earlier you start saving, the more your money grows
Is retirement feeling so far away that you don't want to think about it? Or, perhaps, not so far away?
There's no time like the present to start saving regularly to help you reach your goals.
Here's why: When you put money aside for retirement, that money earns interest. The longer time you have to earn interest, the more your money will grow.
Let's look at a hypothetical example of two couples to see how it works.
Bill and Lisa: Bill and Lisa saved $100 each month for 10 years, and then stopped, letting the money sit in an account that earned 5% interest for the next 20 years.
Pam and Ricardo: Pam and Ricardo waited 10 years before starting to save. They then put $100 each month into savings for the next 20 years, earning 5% interest.
The results: After 30 years, Bill and Lisa had put in $12,000 in savings while Ricardo and Pam had put in $24,000. But Bill and Lisa earned more interest compared to the amount they deposited in their account – and they ended up with more money than Pam and Ricardo.
It's the result of compound interest – interest that's earned on the money you deposit into a savings account as well as any previously earned interest on that account (assuming no withdrawals).
Take action with these retirement planning tools & tips
- Calculate how much savings you need to reach your retirement dreams.
- Maximize your employer 401(k) match. If you're not doing this, you may be leaving money on the table.
- Make sure your retirement savings is on track. Contact a financial representative today for more information.
Check out planning for retirement for an overview of retirement savings options.
Visit our tax resource center to learn about retirement plan limits. And, if you're 50 or older, see how you can take advantage of the catch-up contribution amounts to help boost your savings.
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