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The Millennials, Generation X and Baby Boomers may have a different approach to life, but they all set a goal above the rest in terms of money: saving for retirement.
This is revealed in a recent report by Ameriprise Financial, which interviewed about 3,000 wealthy Americans aged 30 to 69 years. Respondents had an investable badet of at least $ 100,000 and more than 700 millionaires.
Respondents included 453 Millennials, defined as aged between 30 and 37 years; 1,104 generation X members, defined between ages 38 and 53; and 1,451 baby boomers, defined as between 54 and 69 years old. According to the survey, each generation indicated that saving and retirement planning was their number one financial priority. This is perhaps the proof that we are trying to catch up financially – about half (52%) of respondents believe that retiring at age 65 is no longer as realistic today as it is in the past. 10 years ago.
Regardless of your net worth or income, the sooner you start saving for retirement, the less you really need to put it away. Save and invest as early as possible with an IRA or a professional pension plan, such as a 401 (k), helps your balance grow exponentially with compound interest.
Compound interest is a form of exponential growth that rewards savers and investors, especially those who act early. This is the snowball effect: when you roll a snowball on a hill, it collects more snow. Not only does the original snowball get bigger, but each extra pack grows as well.
Choosing the right place to save can make an even bigger difference. Save and invest in a tax sheltered retirement account, such as an IRA or 401 (k), can give an extra boost to your money.
The most common types of retirement accounts can tax your money differently. If you choose one that differs taxes – for example, a traditional 401 (k) – your full dollar will have the ability to dial, and you will pay taxes when you withdraw the money in retirement. If you choose to put money in a Roth 401 (k) or an IRA, your money will become tax free.
However, it seems that some participants in the survey have something more important than preparing for retirement. One in four said that she would delay or have already delayed her retirement to help her children pay for university. The sentiment was the strongest among millennia – 60% said they would sacrifice their retirement savings to support their children.
Hope is not lost if you missed the boat in your twenties. Starting saving now, wherever you are in your timeline, is better than starting tomorrow or next week. It takes a lot of patience to create wealth and nothing replaces lost time.
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