These days, many people find themselves in a tricky position when it comes to retirement planning. They want to start saving for the long-term, but they also have immediate financial responsibilities (like bills and basic living expenses) to cover. As a result, opening up a retirement account takes the back burner. Does this scenario sound familiar to you? Maybe you’ve been waiting until you get that big promotion or land a better salaried position before you open up a retirement account—but you might be surprised to learn that it’s never too early to start saving, and setting aside even a small amount of money now can pay off big time when you reach retirement age.
Benefits of Starting a Retirement Plan Early
Even if you can’t afford to contribute much to a retirement plan at this point in your life, open an account anyway and put in what you can. This is especially true if you’re lucky enough to have an employer that will match your contributions, but even if you simply open up your own IRA and contribute a small sum each month, you’ll begin taking advantage of the power of compound interest. You see, with compound interest, you actually get to earn interest on your interest as the years go by. Over the course of a few decades, this can turn even a relatively small sum of money into a significant chunk of change.
Worried about not being able to contribute a steady amount towards retirement each month? This is a common concern, especially among freelancers and independent contractors. Fortunately, retirement accounts like SEP-IRAs are designed with no contribution minimums in place. This means you can contribute to your account as much or as seldom as your income allows, making it a flexible retirement option among those with unstable incomes or fluctuating monthly living expenses.
Late to the Game? Don’t Worry!
What if you’ve been working for years and haven’t yet had the chance to set up a retirement account? For starters, relax; while starting earlier is always best, you’re not necessarily doomed to work until you’re 100 just because you’re starting late. Still, to make sure you’re making the most of your investment, your best bet is to meet with an experienced financial advisor, who will be able to guide you towards the retirement account option that’s right for you.
When it comes to retirement, the early bird gets the worm. Looking for professional guidance as you start saving for retirement? Our team at Sterling Group United is here to help; contact us today to get started.