Early Retirement? Think Retirement Early!

With a sagging economy and unemployment numbers on the rise, the dream of retirement for many baby boomers may not come to fruition as quickly as they had once hoped. In fact, retirement may have to be put off until well beyond the age that most people assume they'll begin their latter years of leisure. A large number may indeed have to continue to work well into their 70s. According to some statistics, approximately 40 percent of baby boomers do not feel that they'll have accumulated enough money to retire when the time comes. Why? The reason is typically ineffective (or nonexistent) retirement planning.

Today's young people, however, have a real shot at retiring early. For those just starting out in the business world, retirement can be realized at almost any age. By starting to save money early in life and formulating a solid investment plan, they can achieve retirement goals as early as they desire.

Here are two fictitious examples that clearly describe the difference between two individuals – one that prudently planned and saved while he was young and one that didn't. One of the baby boomers retired at the age of 57. Although he worked for over 40 years, he neglected to save any money during this period of time, nor did he contribute the maximum amount to his employer's pension plan. Thus, he's now working a part-time job in order to supplement his meager pension allowance.

The other individual worked at a company for thirty years. He accumulated over two million dollars in wealth by saving money from the outset and investing it wisely in the company's retirement plan and other stocks, and retired at the ripe old age of 50.

You can probably guess the outcome. The first individual is constantly worried that he will not have enough money to continue to pay his bills and living expenses, while the other gentleman is enjoying his earlier retirement in comfort and serenity. Sure, retirement is not on everyone's list of goals, but those who diligently plan, save and invest from early adulthood throughout their peak earning years stand a much better chance of choosing the time and standard of living at which they'd like to quit working.

Here's another example to further drive the point home: let's assume that you start saving $100 each month toward your retirement as soon as you begin working, perhaps at age 20. If you continue to do so until age 60, you would accumulate around $400,000. However, if you began saving later in life – say, at age 35 – you might only accumulate around $130,000. If one is available, it's critically important to contribute the maximum amount allowable to your employer's 401(k) plan in order to maximize the growth of your money.

The vast majority of us would like to retire at a young age. Unfortunately, this tends to be more the exception than the rule. Start early with a savings program, and plan wisely for your retirement. Then you'll be much more able to go out on your own terms, and sail off into the sunset without a care in the world.

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