WHEN IT COMES TO RETIREMEN T PLANNING, timing is everything.
You have to do some things as early as possible—like starting
to put money away for retirement—but you also have to
consider when to take on big pre-retirement expenses.
Those can include starting a family (with all the daily and
college tuition expenses that entails) or starting a business.
Perhaps you want to do both. But that doesn’t mean you
should let your retirement planning slide.
“The key is to start saving early,” says Ric Edelman,
co-founder of advisory firm Edelman Financial. “The earlier
you start, the more compound interest can work for you.”
Indeed, if a 25-year-old saved just $250 per month, he
or she could expect to have more than $1 million at retire-
ment, assuming a 9 percent average rate of return. But
a decade-long delay in starting that savings account would
require that this individual save more than twice as much
to have the same nest egg.
That’s assuming you don’t tap those savings. But surveys
conducted by the small-business marketing firm Manta found
that 66 percent of entrepreneurs use their personal savings
to launch their companies, while some 34 percent of business
owners have no retirement plan at all. Follow these steps to
avoid making the same mistakes.
Postpone Parenthood if Possible
You might not immediately think of this as a retirement
strategy, but nothing makes
saving early quite as simple
as having kids late. Just ask Ross
Gerber, co-founder of Gerber
Kawasaki Wealth and Investment Management. At 46, he is the
proud parent of two preschoolers, ages 5 and 2.
“Often the easiest way to tell if somebody is rich or poor
is to look at the age they were when they started a family,”
says Gerber. “The later you start, the better.”
The Department of Agriculture estimates that the
average middle-income family spends more than $1, 100 a
month raising a child. Each month you delay that expense
Get ready for big life expenses, including retirement, with these tips
BY KATHY KRISTOF
BALANCE SPENDING NOW
WITH SAVING FOR LATER
Almost half of Americans
prioritize saving for their
kids’ education over their
own retirement, according
to Personal Capital.
The Fidelity Retirement ScoreSM
It’s like a credit score for your retirement plan. Answer just a few questions and we’ll give you
a numerical score that shows you how well you’re doing as you save for retirement, and help
you find ways to improve your score.
IMPORTANT: The projections or other information generated by the Fidelity Retirement Score regarding the likelihood of various investment outcomes are
hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Your results may vary with each use and over time.