If your goal is to save one million dollars by age 65 you better get started today. Homes, cars, and kids all eat away at your disposable income but paying yourself first and beginning to save as early as possible will help you avoid the high cost of waiting. The longer you put off your retirement savings, the more money you could have to put away each month to reach your one million dollar goal. Let me explain,
- If Jim and Mary begin saving $3,233 each ($6,466 total), a year at age 25 with an assumed average annual return of 6%, they will have $ 1,005,722 in their retirement account by age 65!
- Jim’s colleague Robert and his wife decide they are going to delay their retirement funding until they can better afford it. But, before they know it they are 45 years old and haven’t saved a dime. Robert and his wife will have to save $13,601.50 each ($27,203 total), a year with an assumed average annual return of 6% in order to reach Jim and Mary’s $1,005,722!
Robert and his wife’s cost of waiting forces them to save $20,737 more each year than Jim and Mary! That’s a huge difference, one that most families will never make-up for during their accumulation periods. Put the time value of money to work for your family, start saving today!
The example and interest rates above are hypothetical and do not represent any actual savings plan. This example does not include fees, expenses or any applicable taxes which will reduce outcomes. The example utilizes a constant nominal 6% rate of return, actual rates of return will fluctuate. Interest is credited annually in the example. OPES Financial Solutions cautions the reader that actual results could differ materially from those set forth in the example above, depending on the outcome of certain factors. The above example is provided for illustrative purposes only. OPES Financial Solutions nor its licensed members offer legal or tax advise. Please check with your legal and tax professionals for specific advice about your situation.