By: Laura Walton AFC®
Move over Black Friday and Cyber Monday. Retirement dollars are on sale TODAY!
With shopping top of mind this time of year, we’re alert to bargains. The Black Friday and Cyber Monday deals are on consumer goods and services, things we can use and gift today. But if you can forego the instant gratification of buying that good or service, you can get a great deal on retirement dollars!
Retirement dollars? Yes, the money you put away to buy goods and services once you retire and don’t have a paycheck to rely on. It’s not as much fun as walking out of a store with something in a shopping bag or checking the “buy now” box online but just think what it will buy you down the road.
How much will you save? What’s the sale price? Well, it depends. It depends on your age – the younger you are the deeper the discount. Look below to find your price:
A 95% discount if you’re 20 years old – that’s a gonga! $300 today buys you $9,576.13 in retirement. We work hard to convince our younger clients of this phenomenon. We talk about what Einstein called the “8th wonder of the world – compound interest.” We talk about the Rule of 72 (divide 72 by your rate of return; the answer is the number of years it takes your money to double). And we compare two savers – one that started saving early and then quit after 10 years versus one that started saving late but saved the rest of their life. Who ends up with more? The early saver!
A friend of mine has a favorite rationale for spending money that goes like this: “it’s not what you spend, it’s what you save.” Based on that alone, the 95% savings on retirement dollars might even get a 20 year old excited about buying something he won’t use for 45 years.