Retirement Planning Center

There are several benefits to starting early in your retirement planning and saving.

1. The earlier you start saving, the more time your money has to grow due to compound earnings. This chart demonstrates the value of compound earnings over time.

   For example, putting $250 a month in your mattress or in your safe deposit box over 30 years would yield about $90,000; however, stick that amount in an investment yielding just 4 percent, and you’ll see more than $173,000 at the end of your 30 years. That’s almost twice the amount invested. At 6 percent, you’ll have more than $251,000. That’s because your money is working for you. Compounding means that your interest is earning interest.

   Calculate how regular payments into your own retirement savings can add up over time.

   30/360 rate calculations were used.

2. Waiting just a few years will end up causing you to forfeit more earnings than you may think.

   For example, if you invested $250 every month for 35 years in an account earning 4 percent, you would have more than $228,000. Wait just five years to start investing $250 every month, and you'll end up with just over $173,000. That's a $58,000 difference with only $15,000 of that being principal ($250 a month times 12 months times five years), leaving $43,000 of earnings just in interest for starting your retirement planning just five years earlier.

   30/360 rate calculations were used.

3. Starting early also gives you more time to plan and added flexibility.

Are you having trouble getting started because you think you cannot afford to set aside money for retirement? Here are some helpful hints for finding that extra money for retirement.

• Use tax refunds. Don't spend it, invest it in your retirement. If you get a refund each year, you are probably having too much tax deducted. Reduce your withholding and increase your retirement account contribution.

• Use raises. Raises make a great one-time contribution. Make a commitment to put the extra money into a retirement account.

• Use former loan payments. If you've been making payments to a loan, you are used to setting aside that money and living without it. Once the loan is paid off, use this money for a contribution to your retirement plan each month.

  A good way to do this is to set up a systematic withdrawal from your checking or savings account into an Individual Retirement Account (IRA).

You may want to consult with your tax counsel or other professionals for legal and tax advice.