When should you start? Are you kidding me? You haven’t started already?
You should start now...this very second...no kidding, I mean start right now!
In the entire complicated world of personal finance, this is probably the only question where the answer is crystal clear.
The sooner you start, the better off you’ll be.
Don’t believe us? Look at the numbers. CNNMoney says that if you start investing $3,000 a year when you’re 25 years old and then stop when you turn 35, you’ll be better off than starting at 35 and saving $3,000 a year until you’re 65.
Really. Saving now and stopping when your expenses rise is better than waiting until you make more money in the future.
The best strategy, of course, is to save early and not stop. But the key takeaway here is that longer your money sits in a tax-deferred account, the better off you’ll be.
Don’t make the mistake that so many people make and postpone retirement saving until you can afford it. In retirement planning, the one thing you can’t afford is time.
But wait, you say, my situation is different.
Sure, we say, of course it is.
Maybe you’re in debt up to your eyeballs and you’re only 25 years old. We get it. You are sort of an exception. So let’s look at your situation.
Is there a 401(k) plan on your job? Does your employer match your contributions?
If so, most experts would say get in the plan, contribute enough to get the maximum match from your boss, and then use anything else left over to pay off debt.
But maybe your job doesn’t have a 401(k) plan. How about opening an IRA? Are you eligible? Maybe you should talk to a few experts.
In fact, that’s probably the best advice we could give you: find a few experts who are willing to talk with you and get some suggestions.
For goodness sake, didn’t you just tell us that you’re in debt up to your eyeballs and you’re only 25?
Get some help. Fast!