A 20 Year Old Could Need to Save $7 Million for Retirement

By Mandi Woodruff
Courtesy of Yahoo Finance

Full Article here

Cliff Notes (C’mon its 13 bullet points you can read this):

  • 20 somethings don’t save money for two reasons:
    • “There are bills to pay, debt to be tackled, apartments to rent, and social lives to be had.”
    • They think that their money is better served in their pockets now.
  • Due to inflation, a 20 something will need $7,000,000 at retirement!A 25 year old making $50,000 would need to save 14.65% of their salary througout their career.
    • In 1970, someone could have retired with just $166,000.
    • Today, someone needs around $1,000,000.
  • TIME IS ON YOUR SIDE!
  • Saving 6% of your pay at 25 is much more valuable than saving 8% at 55.
  • Case Study:IF you decide to invest while you are younger you stand to have a significant amount more at retirement and “people who do that earlier set themselves up much better for success.”
    • Jennifer, 22, making $3,000 a month, saves 5% of her salary in a 401(k) with a 5% employer match ($300 a month). She earns 6% at year on her investment and ends up with $753,849 at age 65. (assuming she never increases her contribution or gets a raise)
    • Jennifer decides not to invest young, instead she waits till she moves up in the company and is making $6,000 a month ($600 a month) but is now 35. Same savings of 5% with 5% match and same investment, at 65 she has $317,843. She lost out on $436,000 by waiting!!!

*Note: We do not own Cliff Notes or have any relation with them with are just using them as an example of a book synopsis company.

Inspiration

“Open your eyes, look within.  Are you satisfied with the life you’re living?”
-Bob Marley

“The lack of money is the root of all evil”
-Mark Twain

“Success is the ability—to go from failure to failure—without losing your enthusiasm.”
-Winston Churchill

“It’s what you do in the present that will redeem the past and thereby change the future.”
-Paulo Coelho

Inspiration Archive

Disclaimer

Investment products and services offered through Leigh Baldwin & Co., LLC, and member: FINRA / SIPC. Investments are NOT insured by the FDIC or any federal or state governmental agency, and are NOT deposits or other obligations of, or guaranteed by, Leigh Baldwin & Co., LLC or its affiliates. Investments are subject to investment risks, including the possible loss of principal value or amount invested. The investments have no bank guarantee.

Projections and forward-looking statements regarding estimated investment outcomes are based on assumptions that we believe are reasonable at this time. However, actual results may vary materially from stated expectations, and we make no guarantees of the future performance of an investment in our accounts described on this website. The performance results do not reflect the deduction of other fees or expenses a client may incur in the management of such client’s investment advisory account. A client’s return with respect to an investment would be reduced by any fees or expenses a client may incur in the management of its investment advisory account. Please contact us to learn more about our fees. Past performance is not a guarantee of future results.

All comments contained herein are for informational purposes only and should not be considered as a solicitation to buy or sell any security. No advice may be rendered by Leigh Baldwin & CO., LLC unless a client management agreement is in place. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from its usage.