Benefits of Investing Early

Investing early and often are the vital components to long- term financial planning.

Commonly people ask themselves is it worth?  Am I saving enough?  When should I start?

American Funds, put together the below are article to detail some of the important answers to these questions...

Portions of Article Reprinted from-  https://americanfundsretirement.retire.americanfunds.com/planning/plans/benefits-of-starting-early.htm

Compound earnings can pay off

“Make money on your money” is the concept behind compounding. Compounding is when the money you earn from your investments is reinvested for the opportunity to earn even more.
By investing in a retirement plan, you can get even more benefit from the power of compounding with tax-deferral. Your retirement account has the potential to grow faster because the money you would have paid in taxes on earnings each year remains in the account and can earn additional money.
Keep in mind, though, that while compounding can make an impact over many years, there may be periods where your money won’t grow.
The earlier you start, the longer your money has the chance to compound. Use our investing calculator to find out how much your retirement dollars could grow, given the benefit of time.

Waiting may cost you

Waiting to start saving can have a major impact on your retirement.
For example, suppose you have a current salary of $30,000, receive 4% annual raises, and plan to retire in 30 years. You put 4% of your salary into a retirement plan each year and earn an 8% annual return.

• If you started investing today, you’d have $220,944 when you retire.
• If you waited 5 years before investing, you’d have $164,878 (assuming the same retirement date, salary, raises, savings rate and return).
• In this case, waiting five years would cost you $56,066.