At this stage of your life, your most valuable asset isn't youthful vigor or a full head of hair. It's time. Because you're decades from retirement, contributions to a 401(k) or other retirement plan will have years to compound and grow. Even a modest contribution now will pack a much greater wallop than a significantly larger contribution when you're in your forties and fifties.
If you start socking away $200 a month in a retirement account from the moment you land your first full-time job at age 22, within ten years you'll have a stash of more than $37,000, assuming your investments grow 8% a year. In 20 years, you'll have more than $122,000, and by the time you reach age 67, your nest egg will be worth $1.2 million.
Stuart Ritter, a certified financial planner for T. Rowe Price, recommends investing 15% of your salary toward retirement. That may seem like an unreachable goal for young people with other demands on their paycheck. If you're pulling in $30,000 a year, for example, that's $375 a month. But with tax breaks associated with employer-sponsored retirement plans, plus a possible employer match, you can reduce your actual out-of-pocket contribution. Even a smaller contribution will give you a serious head start on saving, so you'll have a bigger stash that can grow for decades -- plus more wiggle room to deal with the competing demands on your paycheck later on.
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: 5 Costly Retirement Surprises 10 Things You Must Know About Social Security 10 Most Tax-Friendly States for Retirees The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.