Getting older is unavoidable. At some point in time, you will retire from work and need to support yourself. Social Security alone will not likely cover all of your costs. You may even receive some retirement benefits from your former employer but that still may not be enough to live on. The only way to truly ensure that you are secure financially when it is time to retire is to begin to save some of the money you are earning by investing in an interest bearing savings accounts or another investment account.
If you do this, when that time comes for you to retire, you will be able to do so securely. Whether you have 5 or 40 years left before you retire, you will need to do some planning based upon where you are now and take action. With a little discipline and determination, it is possible to achieve a comfortable retirement.
Remember, time is the most important constraint to consider when it comes to your retirement. The more time you have to invest, the better it will be for you. This is because of the power of compounding earnings. Over time, you are able to accumulate more with less. For example, let's assume you invest $1,000 at one time and get 6 percent interest each year. At the end of the first year your $1,000 investment will be worth $1,060. However the magic begins the next year. Rather than just getting $60 in interest, you will get $63.60 (6 percent of $1,060). As time goes on, the interest amounts get larger and larger. Over 30 years, the interest will total $5,743. That's a lot more than the $60 a year ($1,800) that you would have built up without compounding. That's the power of compounding!