Are you investing for retirement yet?

As I talk to more 20 and 30 somethings I’ve realized the majority seem uncomfortable talking about their finances. Either their too shy, ashamed or they just haven’t really thought about saving for retirement. I think this is going to be a real issue when we start getting older, I’m turning 31 this year.

Here’s the thing, we can’t not think about saving for retirement. According to the Social Security Board’s 2023 annual report, Social Security and other disability benefits will be depleted by 2034. Which means we can’t count on the roughly $1,600 monthly check. This means, that in order to live comfortably in our life after work, we need to start putting away some serious money.

But let’s not freak out, remember we (in our 20’s and 30’s) have so much time on our hands. The power of compounding is profound! Take a look at the figure below just as an example…

What this shows is a $541 per month contribution to your retirement account has a huge up side. Why did I put this random figure as an example? Because that is about how much you can put into a Roth IRA each month. That will get you to your yearly contribution limit of $6,500. What I like to do is invest $250 every other week which works out just perfectly over 52 weeks.

How much will I have?

As a 20 year old (if you’re reading this when your 20, I’m so excited for you!) if you invest only this amount until you’re 60 you will have over $1.7 million dollars. Do you want to know the magic?

Let me just sprinkle some realization dust for you. Do you think as you get older your salary will get bigger? I sure hope so! Or we’re going to have a sit down about your self-worth, which should be maxed out right now! Even if your retirement isn’t. I’ve heard good things.

Do you want another piece of crazy info? This calculator doesn’t take into account any dividends that you reinvest through the DRIP. Which allows all dividends to be reinvested automatically, this is like 2x exponential.

If you’re a 30 year old like me, and you retire at the “proper retirement age” of 65, take a look, we’ll have what is that like $1.2 million dollars. That’s crazy!

All I’m saying is, if you haven’t started investing yet, it isn’t too late. We can have a fantastic retirement if we start now. But where do I start? Here is my referral link to Betterment. If you use it, we both get something. I like Betterment because if you aren’t sure about what to invest in, you don’t have to worry! This is a robot-investor which means it will invest and adjust based on your retirement timeline. There are some other cool features as well.

TLDR

We have time to invest and build a substantial retirement. This is especially important for us 20 and 30 somethings, because social security doesn’t look like it will last for us. So, have you started investing yet?

Thank you for reading! Please leave a comment, I would love to talk to you!

-Rob