Benefit to Early Investing for Retirement

Simply put, the benefit to early investing for retirement is that you take advantage of a longer time period for your investment funds to grow.

This is a concept that many people…especially younger folks…simply don’t give enough of their thoughts to.

For many, the idea of investing toward retirement is something they’ll “get around to someday”.

Unfortunately, most people never get around to thinking about retirement, let alone investing for it, until it’s far too late.

This is why over 90% of those at the traditional retirement age are broke and can’t understand why they can’t afford to live a retirement lifestyle that they’d like to.

Although the economic landscape has changed dramatically over the last couple of decades to where you’re likely to work in several different jobs/careers over your working lifetime, do you still believe that your retirement will somehow “take care of itself”?

If you’re like most people, you may have thought this way at some time. However, it’s time to think differently about your retirement days.

One key factor to consider is that the earlier you begin to save and invest, the more you can take advantage of compound interest. There are many retirement calculators you can access online for free.

I would suggest that you use some and kind of play around with them. Enter in some figures and get a good idea of just how powerful compound interest is.

More than likely you’ve experienced this concept in reverse on your various credit cards! Isn’t it time that you begin to see the benefit to early investing for retirement by putting the power of compound interest to work for you rather than your creditors?

I want to bring up something here that’s vitally important when you’re looking at this idea of compound interest and the benefit to early investing for retirement. While this idea is fantastic when we look at the retirement calculators and all the projections, remember that these projections assume that you’ll always receive gains on your investments.

When you plug in the idea that you’ll save $200 a month for 20 years and assume a 10% rate of compounding interest, the end result looks great.

But will you really receive a consistent 10% interest rate for 20 years?

This is an important question to ask yourself. Now, you may not get that every year but, again, the assumption is that you’ll average that rate over the 20 year time period. While there are funds in existence that have done this over the last 20 years, remember that the past is different from the future.

Especially in today’s world with the abundance of corrupt politicians, greedy CEO’s who raid pension plans, bank bailouts, etc.

Therefore, while it’s great to save and invest, I would suggest that you also spend considerable time educating yourself about other means of income for retirement. Invest time in businesses that can give you a nice, consistent residual income now and in retirement.

You may want to build your own websites for an extra income stream. You may want to join a network marketing business. You may want to look at investing in real estate. You may want to look at investing in shorter term stocks or options rather than having all your money in long term investments where you’re hoping for consistent long term growth.

Be sure that you think long and hard about putting all your retirement dreams into the idea that the stock market will climb nice and high just in time for you to retire nicely off those gains.

Yes, the benefit to early investing for retirement is a good one. But, if recent events are a precursor for the future, you may find yourself trying to retire just as the market may be declining on you.

If you look at some of the above mentioned business ideas, you’ll be able to offset any retirement fund losses with a healthy dose of monthly residual income.