6 Reasons to Start Saving For Retirement In Your Twenties

It is hard to visualize life four to 6 decades down the road, which is why most young people have tonnes of excuses as to why they do not want to start saving for retirement. However, it is essential to think of those days when you will have only six months left to your last paycheck. Many financial experts and sites like Investors Hangout recommend that you begin to consider your retirement as early as in your twenties seriously. These reasons below will enlighten you on just how essential your retirement fund is:

Waiting to start saving later will cost you

Putting off your saving plan for your retirement can have a significant impact on your fund. Every month takes out a little money from it. For instance, if you have a current salary of $30,000 with an annual increment of 4%; and you place 4% of it in a retirement fund every year, expect an 8% yearly return and to retire in 30 years: starting now will give you $220,994 by your retirement date, while waiting five years will provide you with $164,878, which is a whole $56,066 less.

Guaranteed returns on your savings

Most retirement plans offer you absolute guarantees on minimum rates of returns. This essentially means that when retirement rolls by, you will have a total fund that is more than your total contributions.

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You have a wider selection of investment options

Having more time to invest gives you the leeway to try riskier investments that will have more significant returns. If you start in your twenties, you have greater wiggle room, and time to recover in case your risky investment goes south, otherwise, starting late restricts you to safer investment options with lesser returns.  

You have fewer expenses

While you are still young, you only have yourself to worry about; no home mortgages, family expenses or other things holding you back. Take advantage of this time to make retirement savings a priority on your budget.

You can retire easy

Your retirement should not be a time to get a side hustle or wake up at 0500h like when you were younger. Again, you may not want to rely on the welfare system as your only choice for your financial needs. Welfare provides you with limited funds that will only get you the bare minimum.  A stable retirement fund will ensure that you will live comfortably throughout your old age or travel the world as you’d wish.

Children are not a retirement plan

Spending time with your kids will provide for great bonding time, but having to live with them or rely on them for basic needs is not a good idea. Whether they welcome you with open arms or feel that you are overstretching their budget, relying on your children during your retirement is rather inconvenient both for them and for you. If you are dependent on them, or anyone else financially, you also give up your freedom.


Retirement may be a long way off, but that is a good thing. It means that you have the time to take control of your retirement and have your dream lifestyle during that time.