When to start saving retirement
You MUST Start Retirement Planning in Your 20's!
hi YouTube it's Jenny Lee here those of
you who know me in real life or even if
you just follow me on social media you
may know that I recently started a new
job now starting a new job could be
really really awesome and exciting but
it also has these really annoying parts
like going to new hire paperwork and
doing all the HR stuff that you have to
do I just want to stress in this video
that it is so important that you
actually redo all of those detailed
documents especially when it comes to
your benefits like your your retirement
plan when I was a senior in college I
read a book called women and money by
Suze Orman now I definitely recommend
that you read this book even if you're
not a woman because even though like
Suzy's tone and her language is geared
toward women because that's her audience
obviously and that's who she can relate
to but she has a lot of important
information just ranging from like the
difference between a checking's in a
savings account to why it's so important
for you to have an emergency fund to
retirement plan investing and also
credit card information and why your
credit score is so important so needless
to say this book is really awesome for
personal finance for anyone the largest
misconception that people have about
retirement investing is that you you
need a lot of money if you want to make
a lot of money and that's just that's
just not true
what you need a lot of is time you have
to start really early if you want to see
tremendous growth over time Suze does a
really great job of providing an example
with two different women in this book
one woman is named Mary and she's 25
years old the other woman is named Dee
and she's 45 years old both Mary and Dee
decide to start saving $200 a month
every month from today moving forward
let's compare both of these women at the
age of 45 wendy was 45 she didn't have
any money invested and she was just
starting to think about investing in
retirement when Mary was 45 she had
already been investing for 20 years so
she had put 48 thousand dollars of her
own money which is 200 a month into her
retirement plan and assuming that she
got on average 8% return on her
man the total value of her retirement
plan investment was a hundred and
eighteen thousand five hundred eighty
nine dollars now let's look at the two
women when they were 65 Dee has now been
investing for twenty years so she's put
aside forty eight thousand dollars of
her own money and she's now saved one
hundred and eighteen thousand five
hundred eighty nine dollars but mary has
been investing for forty years she has
set aside ninety six thousand dollars in
her retirement plan the total value of
that given on average and eight percent
return on her investment is seven
hundred and two thousand eight hundred
and fifty six dollars so if you think
about it at the age of 65 the two women
had a difference of over five hundred
and eighty thousand dollars in the
amount that they were able to save and
Mary didn't have really any more money
than they did the only difference
between them was that Mary started
earlier okay she had the privilege of
time on her side she had an extra 20
years of saving the reason that this is
so important is because the government
sets limits to how much you can put
towards retirement each year so let's
say for example that these two women had
invested in traditional IRA accounts
this year 2015 the limit is five
thousand five hundred dollars so that
means that you can only put each month
four hundred and fifty eight dollars
towards your retirement plan and you
can't put any more than that so Mary
she'd be fine she's been putting two
hundred every month so that's totally
fine she's actually saving less than the
maximum she could put in the retirement
account but let's say Dee wants to be
really really aggressive she realizes
that she's forty five and she should
have started twenty years ago
she's like comment let me start now and
let me just put as much as I can in
order for her to be able to get to seven
hundred two thousand dollars by the time
she's 65 like Mary did she would have to
put a thousand two hundred dollars a
month from the time she starts investing
to when she turned 65 she literally
can't do that because the government
prevents her from doing that so it is
really really really important that if
you do have the time on your side that
you pay attention to this information
now and you actually take action if you
are like in your third
40s or 50s and you haven't sorted which
your retirement investing I don't want
you to be disheartened by this video
obviously it would be a lot better if
you had started earlier but you can't
you know cry over spilled milk you can't
go back and get that time back but what
what you can do is start now put the
maximum contribution towards your
retirement plan if you um if you can
afford that and yeah just sort of just
take action now because every day that
passes you you can't get that day back I
hope that this video kind of gave you a
quick idea of why it's so important that
you use time to your advantage and that
you make the most of the time that you
do have if you have any comments about
this video or questions or if you want
to know more about anything that I
mentioned definitely comment below like
the video give it a thumbs up share it
with your friends subscribe to the
channel if you have it yet already you
can contact me at mis be helpful @
gmail.com so yeah go ahead and reach out
and if there's anything that you like to
know more about I'm here to help and
that's it until next time peace
