Retirement often is the discussion of an older crowd, perhaps those in their 50s or 60s, maybe even 40s, but hardly would be something you’d hear at a round table of 20 or 30-somethings.
Then again, maybe you should.
The fact remains that retirement isn’t about one specific demographic or age per say but rather a mindset that centers on saving money at any age for the time, even if it is 30 or 40 years away, when you opt to walk away from your career and live comfortably.
The key word there is “comfortably.”
You might ask yourself why it is important for someone in their 20s to start saving for retirement, when in actuality they have quite a bit of time between now and their golden years. The reason is quite simple in that if the opportunity presents itself to start a retirement fund, then it should take priority in addition to saving money in general.
Those in their 20s and have a job that allows them to pay into a retirement fund, whether it’s some sort of 401K or IRA, and the company matches every dollar you put into it, why would you walk away from free money, regardless of your age?
If anything, when you think about a 20 something year old individual, that is the time when you’d want to save and be able to put aside more than as you get older. How, you ask? When you’re 20, you might not have the financial responsibility of a family, a mortgage or a plethora of debt that is related to living expenses on a day to day basis. That time period, when maybe you’re living at home at the moment or have your first modest apartment when all the utilities are included, for instance, you should have more disposable income versus maybe 10 or 15 years from now. Take the opportunity to resist spending extra money on vacations, shopping sprees or going out every weekend with your friends and instead pay yourself five percent of your paycheck for a savings account and another three to five percent for a retirement fund.
You won’t miss that money and if for some reason you’d lose your job in your 30s or 40s, you’ve already spent the better part of a decade saving if your income dries up or disappears completely.
Saving for retirement isn’t something that is exclusive to an older crowd. That isn’t to suggest that a 20 something year old is going to talk retirement with their buddies but being able to realize that retirement and saving for it is important shows great maturity and will translate into that much more financial security as you get older.
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