It’s Never too Early to Start Planning the Future

When you’re in your twenties, it’s hard to consider life when you are reaching the golden years. Right now you have all your hair, a healthy body and the thought that sixty-something will never arrive. However, it will sneak up on you. Before you know it, you will be facing retirement and wondering where the years went. There are currently 3.4 million seniors over the age of 65 who are living below the national poverty level. You can avoid being one of those people if you take steps to boost your retirement now.

The Beauty of Compound Interest
The bottom is that you compound interest equals free money, so you should start tapping it as soon as possible. When you invest your money into investments, they will earn more money. Reinvest those earnings and your funds will grow rapidly. If you invest $2,000 a year between the ages of 25 and 33 and then only put in a dollar per year, you will have more money at age 65 than someone who saves $2,000 a year starting at age 35 and continues saving for 32 years. That is the miracle of compound interest, and you will be richly rewarded for starting early.

Have Goals
It doesn’t matter if you are fresh out of college at age 22 or looking at your 40th birthday arriving this year, it’s never too late to start setting goals and saving. While you will benefit greatly from starting early, you also shouldn’t abandon the efforts because you are older. Set short-term, medium and long-term goals. A financial planner can be invaluable for helping you determine where you want to be in five, ten and twenty years. They will also help you set goals regarding college educations for the kids, travel and retirement.

Embrace the Budget
With the goals in place, you can set a budget. Even if you are in your fifties, you can still set up a budget to help you meet your retirement goals. You will have to set money aside for investments, and older people who are just getting started may have to choose slightly riskier options with better returns. However, it’s important for you to stay within budget if you are going to stay on track. This is another area where a financial advisor will be a true lifesaver.

Take Care with Debt
The easiest way to control debt is to avoid it in the first place. If you are in your twenties and just starting out, make sure that you don’t use the credit cards for everything under the sun. They aren’t free money. They are actually extremely expensive when you start to calculate the interest associated with them. Save the cards for emergencies, and make sure you pay them off as soon as possible.

If you are older and it’s a little too late for this sage advice, there is still hope for you. Part of your goals should be eliminating the debt in your life, and you should stay on track by not charging items and paying extra on the bills. Your retirement funds will go much further if you aren’t having to make payments on the credit cards.

U.S. News reports that over a third of the nation’s Social Security recipients are almost entirely dependent on those checks. While you can survive if you don’t have other debt, you certainly won’t be able to travel or really enjoy your retirement. Prepare for retirement and make sure you are ready for the golden years by starting your retirement planning as soon as possible.