The Benefits of Saving for Retirement Early
August 20, 2021
Have you started thinking about your future Retirement Plans yet? Even if you’re currently in your 20s or 30s and are just getting started in your career, putting money away for retirement as soon as possible can give your money extra time to grow and may help you retire on time in comfort. While saving for retirement early is an important and complex topic, there are a few prime benefits that may convince you to open up a new retirement fund. Take a look at some of the main perks of being an early saver.
You Can Get a Head Start on Compound Interest
Perhaps the most important reason you should consider starting a retirement account as soon as possible is because the earlier you begin your retirement savings, the more time you have for compound interest to grow your funds. Compound interest allows your investments to grow over time, and can leave you with significantly more money by retirement time than you initially put in. Taking advantage of compound interest is one of the simplest and most effective ways to reach your retirement savings goals, so it’s best to get started as soon as you can.
Taking Advantage of Retirement Accounts Could Offer Tax Perks
In some cases, you may be able to use your retirement accounts to cut down your tax bill and benefit from the savings. Ask your accountant or financial advisor about the retirement accounts you’re eligible for that could provide these tax perks*.
Keep in mind that:
- Some retirement account withholdings may not be subject to income tax
- Your employer may offer to match whatever amount you put into your sponsored retirement account up to a certain point
- Putting more pre-tax money into your retirement accounts could help you lower your overall tax bill at the end of the fiscal year
Saving Now Can Help You Build Healthy Future Habits
Starting to save retirement funds early can help you develop your financial literacy and set you up for a lifetime filled with healthy financial habits. The earlier you begin getting into the habit of socking away savings for your future retirement, the more motivated you may be to also start:
- Putting away money for a home down payment
- Saving up to start your own business
- Spending money wisely and making sure to put some away for a rainy day
Even if you’re just getting started on your career path and you believe you have plenty of time to save money for retirement, getting started with your Retirement Plans as soon as you can may be the best strategy to help prepare you for a financially comfortable retirement. With benefits such as getting extra time to let compound interest work its magic, taking advantage of tax perks and building up healthy financial habits, saving for retirement early may be a more beneficial strategy than you think.
*Consult your tax advisor
About 1891 Financial Life
At1891 Financial Life, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.
Our portfolio is extensive, ranging from various life insurance policies to our new MYGA to support your financial needs no matter what stage of life you’re in. For more information, contact us at (855) 804-7424.