Wednesday, June 8, 2016


Your 20s may seem like an odd time to think of retirement, but it’s actually the perfect moment to start planning for your later years. That’s because the earlier you start saving, the more time your money has to grow.
Savers who begin setting aside 10% of their earnings at 25, for example, could amass significantly more by retirement age than those who wait just five years to start saving. You can use online calculators to see how much starting saving now can produce once you reach retirement.
Building a nest egg on a starter salary and a shoestring budget can seem daunting, though. Focusing on the incremental savings, rather than the goal, can help your savings objectives feel more manageable.


For those earning around $25,000 a year, the median income for 20 to 24 year olds in 2015, saving the recommended sum of 10% amounts to a little more than $200 a month.
It may seem like a reach, but consider this: If you start saving $100 a month at age 25 and invest it to return 7.7% a year — the average total return of the Standard & Poor’s 500 Index of U.S. stocks over the past decade — you’ll have more than $378,000 available at retirement age. And it could be tax-free.
If you wait until you’re 30  to start and save the same monthly amount at the same rate of return, you’ll wind up with less than $253,000.
Several vehicles can help you build a retirement fund. A 401(k) contributory plan, typically offered by your employer, is often the most convenient and easily accessible of these. Contributions you make usually aren’t taxed, which helps reduce your income tax liability.
Pre-tax 401(k) accounts make up around 80% of retirement plans offered by employers, according to the American Benefits Council. Roth 401(k) accounts are another option, though these are less widely available, and money contributed to a Roth 401(k) account goes in after it’s taxed. Money withdrawn from this type of account — including earnings — is usually tax-free.
Companies that offer a 401(k) plan often match employee contributions, up to a certain percentage. This is essentially free money toward your retirement.
If your employer will match your contributions, try to take full advantage and commit a large enough percentage to get the full benefit.


In addition to retirement, it’s also wise to save for a rainy day. Ideally, your emergency fund should be enough to cover three to six months of living expenses.
Some experts suggest setting aside even more for savings and investments: 20%. That’s roughly $415 a month on an annual income of $25,000.
That’s not always feasible, especially if a big chunk of your monthly income goes to student loan and credit card payments. Consider saving what you can, even if it’s just $10 a month.
Making a habit of saving now could serve you well down the road. And, as your income increases, the percentage you save can as well.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved


  1. With all the income fluctuation happening around the globe, it's a good decision to save for our retirement especially if we plan to have our own family. I really enjoyed reading your post because it's very insightful in the financial aspect, unlike the articles I read from rating, inconsistent and unreliable.

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  3. Age doesn't really matter when it comes to saving for your future. I teach my daughter to save the time she learned how to count money, start them young as they say. Discipline and responsibility work both ways, saving doesn't mean you're cutting your shopping spree, definitely not! Indulge yourself from time to time but you have to make sure to put some extra money in the bank first before spending for your vanity.

  4. Saving amount is directly related to the amount you are earning. Hence, it cannot be fixed. For example, it would not be appropriate to say that a 20 somewhat should save $500. To make it better, calculate your needs and subtract it directly from your income. The amount that remains, you can save its 20%. That is what i learned from my finance class in Baytown University and i think it is relevant to share it here.

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  6. You are discussing a very important topic. I agree with you. It is necessary to become economical as soon as possible. At retirement age, people in many countries devote their time to rest. But to be sure of your future, you need to make a deposit in the bank every year. Of course, you will find many formalities and sometimes want to say write my paper for me but the effort will bear fruit.

  7. Hello. Thank you for the article.
    Not so long ago I wrote research paper for sale online on a similar topic.
    You know, the habit of saving is an extremely complex topic. Yes, many young people earn, and not bad enough. But very few people are really able to properly dispose of their money.
    Someone who has received a salary, writes to send her to expensive and not always necessary things - expensive phones, branded clothes, daily trips to restaurants, etc.
    Others start to postpone, as they say in some countries, "for a rainy day" and thus save on themselves, buying only the most necessary things for themselves and their family members.
    I think that full compliance with one of these options is not the right decision. We need to combine, live buying the right but still, sometimes and pamper yourself and your loved ones.
    There is, of course, another option - to put some money into the bank. So do many. But, the sad experience of others, makes some people do not even consider this option ...

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