Dear 20-something Me,

June 10, 2016

Start saving today.

Sincerely,

Your Future Self

That is the piece of advice I most wish I could give my younger self.

According to the Fed’s Economic Well-Being of U.S. Households report released in 2015, 31% of 18 to 29 year olds have given no thought to retirement planning.

I’m here to change that.

The 20-something me didn’t think I could afford to save when I was struggling to pay rent, make student loan payments, and keep my credit card debt from creeping higher each month. But armed with experience, knowledge, and the invaluable 20/20 vision of hindsight, I’m here to tell you know that I could have, and should have, started a savings plan much, much sooner.  Even though I can’t convince my 20-something self, I hope I can persuade you to start saving as early as possible.  Or put more simply, START SAVING NOW!

Let’s look at the impact an early savings plan could have had on me –

Let’s assume that at age 23 I started my professional life making $35,000 per year.  Let’s also assume I started putting 10% of my salary into a company sponsored 401(k) plan, and my annual salary increase was 5%. With inflation at 3% and an average rate of return of 6%, I would have accumulated nearly $68,000 in retirement savings by the age of 33, and today, at 38, I’d have saved nearly $130,000.  Not bad, and this number doesn’t take into account any contributions made by my employer.

So what are you waiting for?

Saving for your future, even something as far off as retirement, is simply a means of paying your future self, so your future self doesn’t have to play catchup. This perspective, or line of thinking, will carry you through adulthood, and it will become automatic even when you get a new job or start your own business.

You owe it to yourself to Get Started on the right financial path no matter your age. Preparing today can help protect you in the future.