Starting a retirement account early is hands-down one of the smartest things you can do for your future self.
There’s no way of knowing how your later years will turn out, and you’ll thank yourself for being prepared.
But here are six reasons why you shouldn’t wait any longer to plan for retirement, you might not have considered.
Put Your Finances To Work
Time is money. Compound interest takes this literally; the earlier you start saving cash, the more time it has to multiply itself. If you start saving at 30 instead of 40, that’s ten years of compound interest you can accrue.
Even if it’s not much to start, regular contributions can lead to some extraordinary results over the next few decades.
Save On Autopilot
Retirement accounts make saving foolproof. It comes with a built-in reason to set money aside, and setting up automatic deposits means it’s never been easier to invest back into yourself. This also prevents the temptation of dipping into a traditional savings account.
Borrowing from these accounts often comes with hefty penalties, so you’re less likely to use them before you retire unless you really need them.
Weave Your Safety Net
The future of Social Security is murky, and that’s a scary thing for those without a retirement plan. Having your own dedicated fund means you’re not relying on the government or your kids to bail you out. Start early, even with small amounts, and you’ll have a much thicker cushion should your finances fall.
You can still access these as an emergency account if you don’t have other options. Life happens, so even if you have to use your retirement account to deal with major medical expenses or unexpected costs before you retire, at least it’s there.
Employer Matching Contributions
Does your job offer a 401K match?
If so, and you aren’t taking advantage of them, you’re literally leaving free money on the table.
Not taking advantage of it is like saying no to a pay increase. We recommend you always contribute at least enough to get the full match. It’s an instant return on your investment, and you won’t always get these golden opportunities to have someone else boost your nest egg.
Protect Against Future Uncertainties
No one can predict the future. The only way to be prepared for what’s coming is to prepare for anything, and that’s exactly what a retirement account can do.
Surprise medical bills are much more of a likelihood once you hit retirement age. But having a healthy retirement account means you don’t have to scramble for cash when life throws something your way.
Prevent the Potential for Shrinking Savings
Investments inside retirement accounts also usually outpace inflation, so your money actually grows in value, not just sits there.
This helps future-proof your savings and gives you a solid foundation to move into retirement with confidence. And with people living longer than ever, starting early ensures you aren’t stressed out late in life, regardless of how the economy fares.
