With the average age of retirement being 63 and our life expectancy raising to just below 80 in the USA we are looking at around 17 years of life without work. Which is just below a quarter of your life! Now consider that for the first 17 you probably won’t be earning and in fact well into your 20’s you could be in education. YOu may have children to look after, grandchildren even? Suddenly you might start to realise just how important saving for your retirement is!
So the question of when is too early to start thinking about retirement? Has a pretty simple answer. Never.
Making smart investments throughout your life is a clever way to get your money working for you without you doing much more than the original spend. It may seem impossible with student debts or rising medical bills, but there are plenty of people in their 20’s who manage to make their money work for them.
Firstly saving is one of the most important lessons you can learn. It doesn’t even have to be a great deal. Putting by just $10 per week from the age of 20 to 63 will give you a basic of $22,360 in your piggy bank. That figure will increase if put to work in a bank. That’s a pretty impressive sum to settle down with at a minimum impact to your yearly income.
Getting onto the property market early is another brilliant first step into securing your retirement. With most mortgages taking 25 years to clear, starting at 20 could see you as a homeowner by 40 years old. According to research homes are being used as a retirement plan more than physical savings.
Start by getting yourself on the lease market as quickly as possible. Apartments like these from Crest are a brilliant way of getting used to the monthly outgoings of a mortgage and running costs of a home. Then, as soon as you are comfortably with meeting the payments, transfer onto the property ladder with your first mortgage. Start small, really small. Then as your pay increases, step up. You are better off owning 2 small properties than one big one and if you start in your twenties then you really do have enough time to consider purchasing a couple of homes before your family home. Consider going in with siblings on your first apartment, with a view to renting which will give you an income and investment for when you retire.
Classic cars are another clever way of putting money by. With old mustangs, Porsches and such like soaring in value. You could get your savings working a little harder than they do in the bank.
Don’t put off preparing for retirement just because it seems so far away. As you get older the years get shorter and before you know it, you are planning the party with all your friends in their 60’s. Make every day count so you can enjoy your future!