Depending on your age, you may have seriously or not-so-seriously started thinking about saving for your retirement. Unfortunately, by the time you get to this point of consideration, it’s probably already a bit late in the game to start saving. The good news, however, is that this article can be your wakeup call to put things in place from today, to ensure you are in the best financial position possible when your golden years finally hit. If you’re fortunate to be young enough that you haven’t even started thinking about retirement yet – “I have my whole life ahead of me to worry about that!” – hopefully this article can inspire you to be a bit more proactive towards your financial future.

To most of us, when we hear the word ‘retire’ we don’t think about what it really means. When you retire, you very likely will not have a salary again for the rest of your life, which can be 15 or more years from your date of retirement. With that in mind, think about the lifestyle you have or want to be living when you’re in that last month before retirement; chances are you won’t be able to afford this lifestyle on one or even two pensions. This is where retirement saving comes to the rescue

Retirement saving however, must be built up over many years to ensure there’s enough funds to support our retired selves. How long should we thus spend on saving?

Put simply; as long as you can. Most bankers and financial planners will tell you the same thing: The ideal time to start saving for retirement is when you start getting an income. This can be getting paid for odd jobs as a teenager but realistically speaking should be in your late teens or 20s when you’ve started earning a consistent salary. The ‘consistent salary’ part is important because it helps form a good saving habit, especially if you’re starting from young and it also creates structure for your saving plan going forward.

Why is it ideal to start saving this early?

Because saving $100 every month for 40 years will gain you more than saving $120 a month for 20 years. Saving from a young age ensures you have a greater financial foundation to build future saving on and means you’ll have a larger bank account balance come retirement than if you started saving in your 30s, 40s or 50s. With the right savings or investment plan, you could save over a million dollars if you started at age 25 and stopped at 65, with a yearly savings figure equal to most monthly car loan instalments. For example, should you use an account with an annual return of 4%, you could save an estimated $1.05 million dollars by saving $4500 per year over 45 years.

Now that we know the ideal age, let’s face facts: chances are, if you‘re reading this and especially if you’re not in your 20s. You may not even be in your 30s. Is it too late for you to begin planning?

Fear not. While it will be more difficult now than a decade ago, you can still save enough for a good retirement if you start now; having less time to save means you need to save more each year. For every 10 years over 20 that you wait to start saving, you’ll probably have to save twice as much per year to hit the same savings goal. It can be done but will require greater effort. What this should therefore indicate is that you will always be better off starting to save now than waiting until later.

Fortunately, there are several ways to help you start your retirement saving. Some companies offer a retirement plan that automatically sends part of your salary to your plan while also matching a percentage of your contribution (portion of your salary being saved). Even if your company doesn’t offer this type of plan, most banks and investment firms do, with especially the latter offering options that can maximise your savings.

The often-used adage goes, ‘there’s no time like the present’. While we can’t be sure, there’s a good chance that the first person to speak those words was referring to planning for their retirement. Even if they weren’t, we can take heed; when is the best time to start saving for retirement? – now!


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