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The 8th Wonder of the World

February 20, 2024

The 8th Wonder of the World

Compound Interest

Starting to invest early helps to supercharge your retirement savings. How? Because time is your friend and your greatest asset with investing. The earlier you start, the more time you allow your money to grow, thanks to compounding. Starting early also helps to mitigate the risks that come with investing.

Let’s look at an example.
*Both investors begin to invest $7,000 a year on January 1st. Assuming an annual rate of return of 8%. Not factoring in inflation.*

Investor A
30 years old and invests for 30 years for a total of $210,000.

Investor B
20 years old and invests for 10 years then stops contributing for a total of $70,000.

Now let’s look at the results.
        Investor A results at age 60
               $856,421
        Investor B results at age 60
               $1,102,042

It is not about the amount you start with; it is about starting. Small contributions today can add up to substantial wealth down the road allowing you to have the financial freedom you dream of.

Disclosure:
Retirement Planning Solutions, LLC is an SEC registered investment adviser. SEC registration does not constitute an endorsement of Retirement Planning Solutions, LLCC by the SEC nor does it indicate that Retirement Planning Solutions, LLC has attained a particular level of skill or ability. This material prepared by Retirement Planning Solutions, LLC is for informational purposes only and is accurate as of the date it was prepared. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Advisory services are only offered to clients or prospective clients where Retirement Planning Solutions, LLC and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Retirement Planning Solutions, LLC unless a client service agreement is in place. This material is not intended to serve as personalized tax and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Retirement Planning Solutions, LLC is not an accounting firm. Please consult with your tax professional regarding your specific tax situation when determining if any of the mentioned strategies are right for you.

Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. No investor should assume that future performance will be profitable, or equal either the previous reflected performance or that of the referenced benchmarks.