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Financial Decisions In Your 20s
By JLP | May 22, 2006
MSN Money has a really nice personal finance section for those in their 20s. I agree that the 20s are some of the most important years of life because the decisions made during that time really impact the future. For instance, if a person chooses NOT to save for retirement during their 20s, they lose out on some critical compounding years, which makes it all the more difficult to save for retirement later in life. Take a look at the numbers for yourself with this calculator I created:
As you can see from this calculator, waiting just 10 years to start saving for retirement means that you have to save more than double your original amount. That’s something to think about.
Topics: Basics, Financial Planning, Retirement Planning | 6 Comments »
May 22nd, 2006 at 12:57 pm
I think there is a problem with “Expected amount at retirement age AFTER inflation” values… they match for both scenarios even when the value above them doesn’t match.
Other than that, I really like the calculator!
May 22nd, 2006 at 2:10 pm
Yep, there’s a problem, but it’s a great idea for a calculator nonetheless!
May 22nd, 2006 at 2:17 pm
Yep, I don’t know what I was thinking. It should be fixed now.
May 22nd, 2006 at 2:28 pm
[...] Thanks to AllFinancialMatters for pointing out this story from MSN Money featuring some average personal finance statistics of people in their 20s. For example, our median net worth is $7,901, but for nearly 25% of us, that figure is negative. We owe more than we own! These numbers are exactly why I created this site! Immediately upon graduation I fell into the trap of living like an adult even though I was earning like a graduate… A few years later and I am really in the hole. But as the MSN story points out, I am young enough to recover from my mistakes. With some planning and hard work I will be out of debt and have a healthy 401(k) before I turn 30. Obviously this site is all about how we can all do the same, but in a nutshell there are three rules that will be repeated here over and over again! [...]
May 22nd, 2006 at 2:44 pm
Wow, that is an eye-opening calculator. As a 22-year old who just graduated from college this past weekend and begin my job in a few months, I surely will begin saving right away. Thanks for the link and the calculator.
May 23rd, 2006 at 10:56 am
This is great! Anything to promote starting your retirement savings immediately is a good thing. Once twenty-somethings realize what a difference it makes in the long run, they will be much more likely to begin contributions early.