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Save At Least 10%

4. Save at least 10% Don't wait-the benefits of compound growth are HUGE, 53% of people age 25-34 have less than $10,000 in savings. (including retirement savings) Com-pound-ing [v. kom-pound-ing]: Compounding is when an asset grows and generates earnings, which are automatically reinvested so they generate more earnings. This means if you have a balance in an account that generates interest, you earn interest on both the original balance and the interest. In short, the more you have, the more you earn. Savings 73% of people age 25-34 have less than $25,000 in savings. (including retirement savings) When it comes to saving, the early bird catches the worm every time. Consider these four investors at age 65 each invested $2,000 per year and earned 8% interest. Mary Scott Tara Michael Mary - $585,000 $600k $500k $400k Scott - $250,000 $300k $200k Tara - $98,000 $100k Michael - $30,700 $0 50 60 Age When Saving Started Starting early means you'll need to save less of your income to get to retirement. For example: John is age 20, he earns $50,000 per year and he wants to save $1,455,810 by the time he is age 67. The percent of his earnings that he needs to save each year to reach his goal depends on the age he starts saving. What if I wait? START = Percent of annual income needed 8.1% 9.7% •.... .... Age: 20 Age: 25 11.8% 14.5% ....... Age: 30 Age: 35 FINISH 18.2% Age: 40 Automate your transfers. You're way more likely to save if you don't have to think about it. Most Americans (83%) believe the best way to create personal savings is to automatically transfer funds from their paychecks or checking accounts to savings and investments-and they're right! WHAT CAN 83% YOU DO ?????????? LifeTuner Sources: Employee Benefit Research Institute // // Exploring the essentials of money www.Life Consumer Federation of America // Financial Services Roundtable

Save At Least 10%

shared by ColumnFive on Jul 18
The most direct of the 7 smart Money Essentials can also be the hardest to get started. Save at least 10%. Sure. Great. Sounds easy in theory, but theres always an unexpected bill or a friend in need ...


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