If you’re old enough to start thinking about sex, you’re old enough to start saving for retirement… A thousand dollars socked away when you’re 20 and growing at 10 percent per year will be almost $73,000 when you’re 65. The same sum saved when you’re 50 will grow to $4,200 at age 65.
A few months ago, I found out what a Roth IRA is. Not from the finance classes I took in college, not from my parents, not from the nice couple I met who’d just retired. I found out what it was through a few money blogs I read, namely Ramit’s and J.D. Roth’s.
I consider myself lucky to have learned about the power of compounding annual interest early on in life. A friend of mine who’s pushing his mid-50’s told me he didn’t start saving for his retirement until he was in his 40’s. Rough stuff. But he’s actually better off than most: apparently, Americans really suck at saving their cash. And seeing as how my generation won’t be getting any favors from the government, it’s a good move to start saving for the future.
I opened an IRA at ING Direct a few weeks ago. Definitely glad that I did. If you’re in your 20’s and reading this, take heed and go open one up for yourself.