Getting an early start
If you're in your 20s, you’re in luck. Starting early and contributing as much as possible to employer-sponsored retirement plans and IRAs may help you to potentially accumulate more money. Why? Because investing in these tax-advantaged accounts means your money will work harder for you.
Even if you invest a relatively small amount on a regular basis, you may still be able to pursue large goals over time thanks to the power of compounding.
Assume that your investments earn 8% annually. If you invest $2,000 a year from age 25 to 35 ($20,000 in all) and then stop completely, you could accumulate $315,000 by age 65. But if you wait until age 35 and invest $2,000 a year for 30 years ($60,000), you'd accumulate just $245,000 by age 65.1
Procrastination has been called the thief of time. Don't let it rob you of a more secure financial future – start investing as early and often as you can.
Retirement planning basics
1 These hypothetical examples assume an 8% annual interest rate compounded monthly. Hypothetical results are for illustrative purposes only and are not indicative of the performance of any particular investment or financial product. Your results will vary.
Important Note: Equitable believes that education is a key step toward addressing your financial goals, and this discussion serves simply as an informational and educational resource. It does not constitute investment advice, nor does it make a direct or indirect recommendation of any particular product or of the appropriateness of any particular investment-related option. Your unique needs, goals and circumstances require the individualized attention of your financial professional. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor.
Equitable Financial Life Insurance Company (New York, NY) issues life insurance and annuity products. Securities offered through Equitable Advisors, LLC, member FINRA, SIPC. Equitable Financial Life Insurance Company and Equitable Advisors are affiliated and do not provide tax or legal advice.
Take the next step
Find out how much income you could have when you retire.
Use our calculator
