Saving a million for retirement is actually relatively easy - IF you start young enough
~300$ a month @ 7% return is a million at age 65 if starting at 20 (That's about 15% of salary for a minimum wage earner)
~600$ a month if starting from 30
I think the biggest issue is people keep putting off saving for instant gratifications (or lack of understanding of compounding interest) and then the amount to get to the 'million' becomes harder and harder, which they then use to justify not saving now and lowering their target retirement, etc.
My advice for anyone:
1. Start Early. The best day to start saving for retirement (Save FIRST right off the paycheck with instant withdrawals before you even get to spend the $$) was on your first paycheck. The second best day is today. Don't delay - Compound interest is your friendand always pay yourself/save first right off the paycheck
2. Saving is addictive. Set a goal with constant savings and you'll be surprised how you actually start saving more when you see your money start growing. "Oh for another $100 a month I'll end with an extra $120K at retirement? Hmm that isnt so hard. I'll eat out one less time a paycheck because im seeing my money grow "
3. You can't go back an re-earn $ once you are out of the workforce. Oversaving is better then undersaving.
It is like the old condom saying "It's better to have one and not need it, then need one and not have it"
|