From Matthew Otto, Private Financial Advisor for SunTrust Investment Services, Inc. • Stop taking on new debt. “The main mistake college students make in terms of saving is really the inverse of saving — it’s taking on too much debt. This trend has been happening for some time.” • It’s not too difficult to save. “Everything is habitual, so start small and initiate ‘paying yourself first’ with small monthly savings of say, three to five percent. Anyone can do this and it will become habitual at a young age. As they get older and earn more they will want to save more. I started at five percent and have been at over 30 percent now for over ten years.” • Start today. “Obviously they’ll need to generate income. To do so, they could consider taking on a part-time job. If they are able to earn an additional $250 a week waiting tables or bartending, that’s an extra thousand dollars a month. If five percent (or $50) is directed to a savings account, that’s $600 a year in additional savings. Making this habitual and continuing until you are 58 would be approximately $155,433 if it was earning eight percent.”
From Mark Clark, CFP and Qualified Kingdom Advisor for Wealth Planning and Design, Inc. • Make saving for retirement a priority. “The usual priority is a car, house, trip, etc. You know the drill: ‘I am young and I will start saving when I get my first raise.’ Before you know it, you have three children, a big mortgage, and two car payments. Life just gets rolling and we think we can always catch up tomorrow.” • Honestly answer these four crucial retirement savings questions and start today on your journey. 1. What do you need to earn on your savings and investment dollars in order to retire at your intended retirement age and have your money last your life expectancy at your desired standard of living? 2. How much do you need to save on an annual basis in order to retire at your intended retirement age and have your money last your life expectancy at your desired standard of living? 3. Doing what you are currently doing, how long do you need to work in order to retire at your intended retirement age and have your money last your life expectancy at your desired standard of living? 4. If you don't change anything that you are currently doing, how much will you need to reduce your standard of living in order to retire at your intended retirement age and have your money last your life expectancy at your desired standard of living?
And if you don’t want to listen to me or either of these money-smart guys, what about listening to one of the smartest people in American history on this matter?
“Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn’t... pays it.” – Albert Einstein
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August 2015
As Mark Clark says, “The one factor in this
And who wants to be trying to outsmart the
equation that we can't control is time. If we
stock market in your 50s or 60s just to make ends
start saving earlier, we can reach our retirement
meet when Social Security doesn’t prove to be
goals without taking more risk than we want.
enough to maintain your expected standard of
The longer we wait to save, the more risk we
living? Start small if you have to, but start today.
may need to take.”
You’ll thank me for it in about four decades.