When you’re in your 20s, retirement seems like a lifetime away. However, starting your retirement planning decades before it actually happens provides some valuable benefits. As soon as you have work and are able to put some money away, it is well worth the financial investment to begin saving while you’re young.

The Importance of Retirement Planning in Your 20’s

1. Money Goes Further With Compound Interest

Compound interest will be key to having enough money to support you in retirement; the more time your retirement fund has to gain compound interest, the more the account will be worth.

For example, if you invest money in an account in your 20s, the interest earned on that money over time is added into the calculation for your next interest payment. You continue to earn money off the interest earned over the decades, and you may see your money grow exponentially. This requires time.

2. Risk Is Reduced Over Time

Every investment you make brings some risk. The market moves up and down, but there is generally less risk over time.

Although past performance does not guarantee future results, in general, investments such as stocks or real estate have moved steadily up over the decades, even if they fluctuate over the years. If you give your investments plenty of time, your likelihood of a desirable outcome could rise significantly.

3. You Won’t Miss the Money as Much

If you wait until your 30s or even your 40s to begin retirement planning, you’ll be playing catch-up in order to save enough. The earlier you start, the less you may need to set aside each month. This is a relatively small part of your overall budget, and as you are younger with less responsibility, you shouldn’t miss the money. Set up an automatic payment to your retirement account and you won’t even need to think about it.

It pays to work with a trusted financial planner from Family Financial Partners. Headquartered in Lexington, KY, their team of financial advisers and investment planners has helped numerous clients with retirement planning since 2005. Call (859) 219-1006 for an initial consultation, or go online to learn how they can help you today. You can also visit feeforplan.com for more information about financial plans tailored to your unique stage of life.