When Should You Start Planning For Retirement?


Most people don’t look forward to getting old. Most people, unless they are lucky, won’t retire until they get old, making the word ‘retirement’ sound less than desirable. Still, we all want to retire someday, and in order to live comfortably, or even just survive, we have to plan.

Is it ever too early to start planning for retirement? I will say that planning fore retirement at 12 is a little overkill, but it’s not much later then that when you should get started. As soon as you start your first full time job you should get started planning. For most, this will be out of college and others it will be out of high school. For those who are planning to head right into the work force and skip college, I strongly urge you to reconsider. You should get some sort of training whether it is trade school or an Associate’s Degree. This will greatly increase your potential salary.

If you have already been working for a while, you should begin planning for retirement right away. Talk with your employer about the retirement plans they have available. It is possible that they have a 401K match plan which means they will match all or a percentage of what you put in. If you don’t take advantage of this, you are leaving money on the table.

If you have been working for a while and are a bit older, don’t worry that you will never be able to retire because you have not been saving. You will just have to start saving a bit more aggressively now. Talk with your employer about starting a plan and invest as much as you can.

The best time to start planning and investing for retirement is right now. The longer you wait, the less you will be able to save. This is largely due to compounding. If you invest $20 a month now and through the next 30 years for a total of $7,200, you will make a lot more than if you invest $7,200 all at once and wait just 10 years. How much more, you ask? At $20 a month for 30 years at an 8% average stock market return, you will end up with $30,005.90, and $7,200 invested for 10 years at an 8% average stock market return will have $15,544.30. That’s almost double with the same investment but more time and compounding. What are you waiting for?

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