Note: These figures are based on the following assumptions:
The money is invested in a retirement account
Retirement at age 67
Doesn’t account for taxes and other fees
How much could you accumulate by age 67 if you invested £100 per month?
Age 20 – If you begin investing for your retirement at age 20, you’ll have 47 years for your money to grow. Your £100 a month will grow to more than £160,000 by the time you are ready to retire.
Age 30 – If you wait until age 30 to start putting away your £100 per month, you’ll still end up with a nice six figure sum.
Age 40 – If you start at age 40, you will accumulate just under £60,000 for your retirement,
Age 50 – Even at age 50, it’s not too late to start saving for retirement. In the 17 years you have left before retirement, you can accumulate almost an extra £30,000.
The Magic of Compound Interest
Starting to invest at a younger age lets you take advantage of the time value of money and the power of compound interest. That means you earn interest on your interest over a longer period, so your growth is much greater.
Age 20 – The 20-year-old’s payments of £100 per month over 47 years means that they put away a bit more than £56,000. But the magic of compound interest added more than £100,000 to their retirement fund.
Age 30 – The 30-year-old’s £100 per month contribution added up to almost £45,000. But that money earnt them nearly another £60,000 in interest.
Age 40 – The 40-year-old saved more than £30,000 and earnt a bit more than £25,000 in interest. A
Age 50 – The 50-year-old set aside a little over £20,000 and earnt £8,750 in interest.
As you can see, the earlier you begin investing, the better. So when is the best time to start investing? The answer is NOW. You can’t go back, but you can begin to make your future better today.
If you would like to know more about preparing for your financial future, speak to your Genistar representative. With Genistar’s complimentary Financial Game Plan, they might be able to show you where to find an extra £100 per month to invest.
The value of your investments could go down as well as up. Past performance is not indicative of future performance, and it is important to consider risk. Genistar does not offer financial advice and nothing within this article is intended to serve as advice, it is provided for illustration only.