How old are you? Actually, the answer to this question doesn’t really matter. If you are old enough to have a job, or if you are old enough to own a (profitable) business, you are old enough to start saving for your retirement.
In fact, the well-known phrase it’s never too late to start saving for retirement should really be changed to it’s never too early to start saving for retirement.
Making a commitment to save for retirement is not easy, especially for new solo attorneys who are struggling to establish their law firm. There are a huge number of expenses for any new business owner. From paying rent to purchasing office furniture, it’s easy to spend every extra penny just keeping your business afloat.
The younger you are, the easier it is to put off saving for retirement. When you are in your 20s or 30s, it can be difficult to imagine that retirement is in your future. The idea of being 40 years older than you are today can be difficult to visualize. However, the years will pass faster than you think. Before you know it, you’ll be ready to retire.
It’s absolutely essential that everyone, regardless of profession, start saving for retirement as early as possible. The sooner you start, the more time your money and investments have to compound and grow. The possibility of exponential growth can only benefit you in the long run!
When it comes to saving for retirement, here are a few ideas to think about:
Remember that a little bit of money goes a long way. Don’t underestimate the value of $100. Assuming a 12% average rate of return on a $100 stock market investment, your initial $100 can grow to $9,305 over the course of 40 years!
Keep the power of compound interest in mind. As outlined in the example above, compound interest works in your favor. The longer your retirement account sits, the larger it will grow over time.
Funding a retirement can result in a tax savings. Many retirement accounts are tax deductible, and your funds can grow tax free until you reach retirement age. To learn more about different types of retirement accounts, and which may be best for you, make sure to consult a financial professional.
Saving for retirement can be a challenge. Not all challenges are bad or difficult. If you look at your retirement savings as a good type of challenge, then you will be excited and happy when you reach your savings goal.
Keep in mind that you may not be able to work forever. Your retirement plan may be, “I’ll just keep working until I’m 80.” However, as you grow older you might find that it’s harder and harder to work. You can never predict with complete certainty how long you will be physically or mentally able to handle the responsibilities.
Knowing that you have a nest egg can be a huge relief. Imagine how good you will feel when you reach your retirement savings goal. Knowing that you have enough money to comfortably retire is enviable.
Believe it or not, you do not need an advanced degree in investment banking to successfully save for retirement. One of the most difficult aspects of saving for retirement is getting motivated to put money away. If you keep in mind the numerous benefits of saving – and start early – you should be able to keep yourself on the right track.