When you’re 30 the most fun thing to do with money is to save it for when you’re 60! I know that’s not true for most of us, but what IS true is that starting with your retirement investing early will yield huge benefits for your future self.
Foundational retirement investment basics start with obligatory compound interest example to get us started: If you are 30 years old and invest $100 a month for 30 years you will have invested $36,000. Assuming an average return of 7% your investment will have grown to $116,945.26, an earning of over $80,000! If you don’t start until you are 40 you will need to invest more than $225 a month to reach that same $116,945.
Understanding 401k's and ROTH IRAs
In this post I’m going to cover the very basics of two of the most common retirement investment accounts out there; 401Ks and ROTH IRAs. We’ll discuss how each one works and what the benefits and limitations are of each one.
The important thing to know before we start is that this is very specific to your retirement investing. This is money that you should assume you can’t touch until you turn 59-1/2 years old. There are other short and long-term savings options/products/strategies out there, emergency funds, vacation savings, etc. That’s not what this is about. This is just about money you are putting away for your retirement…(continue reading on ArchiFinance)
Looking for More? Check Out “How to Improve Your Financial Life in 10 Minutes or Less”
I wrote this as a guest post for my friend Christiana Copper of ArchiFinance. Read the full post over there.
