Over the next three weeks, we will be discussing the “three costliest money mistakes”, according to Shape Magazine. This week we will see why waiting to open an IRA or 401(k) can cost you. Take a look at these motives to encourage you to start your retirement account now!
If you wait to start saving with an IRA or 401(k) you will be:
- Losing money – if you put off starting a retirement account you lose countless dollars you could have earned in interest.
- Missing out on a company match – you are also losing money that you could be getting if your employer offers a match to your contributions. This is “free money” that you are just leaving on the table.
- Having to live on less – if you wait to start a retirement account, you will already be used to the money you are living on and having the money taken out each month will take some adjusting to. The sooner you start, the less you will not notice the money being taken out.
- Having to save the money yourself – while you are not saving with your IRA or 401(k) account, you may be putting money back yourself. But with one of these retirement accounts, the money is taken out automatically, so this makes it easier to save without having to ever see this money. Also, you will reduce your taxable income, because this money will not be taxed!
After looking at the advantages that come with starting a retirement account early, you can see why waiting to open an IRA or 401(k) is listed as one of the costliest money mistakes.
Check back next week as we discuss the second of the three costliest money mistakes!
Have anymore advantages to starting a retirement account early? We’d love to hear from you! Post your comments below!