The best age to begin planning for retirement is the earliest age possible. If any proposition enjoys universal agreement, it's that the sooner a person begins saving toward retirement, the better.
Money invested earlier will be a bigger lump sum on your last day of work than if you wait years to invest that same amount.
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Anisha Sehar, writing for US News & World Report
, does the math: $1,000 invested at age 22, with a 4 percent rate of return each year, turns into $5,400 at age 65 "without you having to do a single thing," whereas the same $1,000 invested at age 40 with the same rate of return, yields $2,666 at age 65.
Botton line: The longer you wait to begin investing, the less time your money has to grow, and the smaller your nest egg when you retire.
Any return is better than none, and ramping up savings toward the end of a career is a popular step. But the power of compound interest is greatest when it's applied early, and over the longest time-frame possible.
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"Start saving as much as you can, as soon as you can," the American Institute of CPAs said
Granted, for most of us, income to invest toward retirement doesn't materialize until we're working full time. But if there's any opportunity to start earlier, you're urged to seize it.
"There is no minimum age at which a retirement account may be established for an individual," Investopedia explains in its primer on the subject, "Retirement Savings Plans for Kids."
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