Saving, and especially saving for retirement is the last thing anyone wants to do with their new paycheck, especially those who are too young to grasp its importance. But often people learn the importance of retirement savings a little too late. Starting an IRA early in life is imperative to a successful financial future. Here are some tips to ponder:
Getting into the habit of saving when you’re young isn’t only beneficial for your retirement but in all aspects of life. Learning to save early by putting a small amount in an IRA and a savings account can prompt a beneficial lifestyle change. When you’re ready to buy a car, a house, or finally retire you won’t be worried in the months leading up to it because you’ll have been saving all along.
Time is on your side in your 20’s. By simply putting as little as 20 dollars away each month, you will accumulate money and even at a low rate of return, these funds will reap the benefits of years of compounding interest adding significant dollars to your account.
Saving now lets you have control over your future. The sad reality is, you may never have an employer willing to match your 401k contributions. Or you may fall on hard times and not be able to use your 401k for what you intended, whether it be due to divorce, falling ill, or job loss. But starting an independent IRA account means you will always have funds to fall back on later in life, should you encounter a curve ball.
With our ever changing world, more millennials are opting for less traditional jobs. Starting an IRA means your contributions will be tax deductible. Saving even a small amount on your taxes each year will not only help you with a little extra cash now, but the savings over the years will be staggeringly beneficial to your pockets!
Saving can be tough whether you are 25 with a new career, or 50 with a solid financial path. The earlier you start, the more ingrained life goals for savings will become, leading you to better financial choices throughout life. The only way to have a financially successful future is to start saving today! Answers from A to Z