Benefits of Saving Early for Retirement (Video)

Benefits of Saving Early for Retirement (Video)

Benefits of Saving Early for Retirement Video

Benefits of Saving Early for Retirement

(Video Transcript)

It’s never too early to start saving. This applies to a lot of things – Saving for college, saving for your emergency fund or saving for a home. It’s especially important to start saving early for retirement.

Why? Because of the benefits of compounding interest.

Compounding means your contributions earn interest on the initial amount invested, and on the interest you accumulate over time. So, the earlier you start investing in your retirement plan, the more potential for investment earnings.

Consider this: Kim starts saving for retirement when she’s 25. She saves $3,000 a year for 10 years and then stops contributing. Kim’s total investment is $30,000. Jill starts saving when she’s 35.  She puts $3,000 each year for 30 years into her 401(k). Her total investment is $90,000.

If we assume an 8% rate of return, Kim’s account balance when she’s 65 would be $472,000.  Jill’s account balance at age 65 would be $367,000. Even though Kim contributed less and for a shorter period of time, her account balance at retirement is over $100,000 more than Jill’s.

Kim’s gains are the result of the earnings on the earnings from her original investment.

What if Kim didn’t stop contributing after 10 years? If she kept saving at the same rate, her account balance at age 65 would have grown to over $839,000!

No matter how many years you have until you retire, make sure you’re saving now. Even a little bit each month can go a long way!

Jenny Carter

Jenny Carter

Vice President, Associate Managing Director, Retirement Plan Services (515) 245-5245 Email Jenny

Jenny Carter is vice president, associate managing director of Retirement Plan Services in the Wealth Management Division at Bankers Trust, where she provides oversight for qualified and nonqualified retirement plan administration. She joined the Bank in 2010 and served in Supervisor and Manager roles before being promoted to her current position in 2015. Jenny holds a Retirement Plan Associate (RPA) designation through Certified Employee Benefits Specialist (CEBS), and Fellow, Life Management Institute (FLMI). Her background includes: implementation, administration, and technical compliance of defined contribution plans. Prior to joining Bankers Trust, Jenny worked in positions at Diversified Investment Advisors, Marsh Advantage America and Principal Financial Group. She earned her Bachelor’s degree in business from William Penn University before starting in retirement services. Jenny is also a contributor of the Retirement and Investing category of the Education Center. Within her category, she shares her expertise on retirement planning. Simplifying complex topics for readers has provided her a unique outlook to what she does at the bank Jenny is active in the community as a volunteer at her children’s school and with Meals from the Heartland, and she previously served as a Girl Scouts troop leader. In her free time, she enjoys being involved in her kids’ activities and reading.

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