Welcome back to Sit. Stay. Save. What's your question? Caller: I'm 27, and retirement feels approximately 400 years away. Caller: Why should I care about saving now? Well, future you would appreciate not working for 400 years. Starting young gives your money more time to grow. It's called the Time Value of Money Say you save $50 per paycheck, earn a 6% average annual return and retire at age 65. That's only $100 a month. What's that going to get you? If you start at age 27 you could have around $175,000 by retirement. Caller: Wait, seriously? When you save for retirement your money has the potential to earn investment returns. Then those investment returns can earn investment returns too. That's called compounding So basically, your money makes money and that money makes more money. Exactly. The earlier you start, the more compounding has to work for you. Try our Savings-to-Income Calculator to see how saving now could impact your future retirement income. [ Bell Ringing ] [ Upbeat Music ]
