The Benefits of Saving for Retirement Early | St. Johns Bank

Saving for retirement can often feel like an overwhelming task for many people. Financial experts recommend saving for retirement as soon as you receive your first paycheck. Putting money aside for your future should be a priority from the get-go, especially once you begin earning money.

Not everyone is able to start a retirement fund at an early age, but there are many perks to doing so. There are financial calculators to help determine how much should be saved to retire comfortably, but any contribution is beneficial. Even the smallest amount saved every month adds up over time.

Reasons to Save for Retirement Early

Let’s explore the benefits of contributing to your savings fund as early as you possibly can:

Compound Interest

One of the most significant reasons to begin saving for retirement right away is compound interest. The idea is that your money grows over time, and the more time it has to grow, the more money you will have when it’s time to retire. This concept is true for many other forms of investment—not just retirement.

Save a Little Now (or a Lot Later)

Since compound interest is the driving force behind a retirement fund’s growth, time is your best friend. This means that saving a little bit now is more beneficial than saving a lot later. You have the option to put a smaller amount of money toward retirement from the get-go or invest a larger amount when you’re older, and many times, the compound interest will prove to have the higher yield in the long run.

Factors That Can Impede Savings

It’s no secret that there are factors that can hinder saving money. When it comes to saving for retirement early, it’s common to not have a high-enough income to put money aside, have other obligations such as student loans to deal with and find that getting a good job right out of college may be challenging.

The key takeaway is to remember that saving a little is better than not saving at all. Don’t become discouraged and refrain from saving for your future because you can’t contribute the full amount you’d like to. Instead, contribute what you can now and increase the amount when you’re able to.

Ready to start saving for retirement? Visit our website today to learn more about our individual retirement options!