Many suggest starting Early to insure a comfortable retirement. You may think starting Early is common sense. You may think starting Early is for someone the “rich” people. You may even be thinking that you agree but just can not save right now. Well, I am going to give you hard facts about why you should start saving for retirement as Early as possible.
Let’s take an example of two friends.
Sara (Early Saver) and Saga ( Late Saver). By the time they turn 25 they have finished their education & started their careers.
Earl immediately sets up a savings plan and puts aside Rs. 1,00,000 each year. Saga thinks that he had like to do that some time in the future but just can not manage it right now.
10 years go by and the friends are now 35. Sara decides that, for whatever reason, he just can not continue contributing to his retirement plan. Saga on the other hand, thinks he had better get started on his retirement plan and decides to put away Rs. 1,00,000 each year. (Monthly Rs. 8333)
30 more years go by and the friends are now 65 and ready for retirement. Sara only has the money he contributed to his plan for the ten years he was just starting out.
Saga has been saving dutifully these last 30 years.
Whom do you think has the larger retirement fund?
You may be surprised to know that most likely Sara has the larger fund. That is right, I said Sara, t who only saved for 10 years. How can this be? It is called the power of compounding. By starting Early, Sara had his nest egg earning interest for 40 years. After the first year, the interest earns interest, etc, etc.
If the friends they earned 10% Sara would have Rs. 3.36 Crore and Saga would have just over Rs. 2 Crore .
Are You Sara or Saga?
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