The Advantages of Starting to Save Young

A quick review of the advantages of starting to save and invest young:

Investing $5,000/year at 8% interest:
starting at 25 = $1.4 million at 65
starting at 30 = $935K at 65
5starting at 35 = $612K at 65
starting at 45 = $247K at 65
starting at 55 = $78K at 65

If you can get the market average of 10% a year, the results of starting early are even more dramatic:
starting at 25 = $2.4 million at 65
starting at 30 = $1.49 million at 65
starting at 35 = $900K at 65
starting at 45 = $315K at 65
starting at 55 = $88K at 65

The advantages of beginning to save in your 20s or 30s is simply dramatic. If you start at 55 rather than 35, you need to save more than 10 times more (in our example, you would need to save $50,000/year rather than $5,000/year).

So, there is the case for starting to save and invest young. Starting to save early is a tremendous advantage. Saving early = comfortable or luxurious retirement.