There are many false perceptions about finances and this is a classic one that many people practice. It is based on the wrong premise.

There are lots of reasons it will be easier to save for retirement when one is older. Most people’s earnings are at a peak then, their children are grown and educated and their home mortgage may have been paid off. This is focusing on the wrong question. Rather than asking when will it be easier to save for retirement, you should be asking, “What will it take for me to have adequate retirement?”

Years ago the thinking was, “Pay off the mortgage, pay for the kid’s college and then save for retirement.” That worked when life expectancy was much shorter. Now, many people can an- ticipate 20 to 30 years in retirement — and sometimes longer. It’s projected that people now in their 20s and 30s will spend as many years in retirement as they did in their careers.

With that likelihood, you will need a bigger nest egg than previous generations to fund those extra years. To have that bigger nest egg means taking a more aggressive approach to saving for retirement while you are still working. The longer you wait, the more you lose the advantage of compounding returns.

Compound returns is one of the most powerful assets you can have in achieving financial security, Einstein referred to the power of compounding interest as one of the “great wonders of the world.” Given normal investment returns, anything you save today will be worth twice as much to you in retirement as money you save eight or nine years from now. That is due to the power of compounding returns. The longer you wait, the more you must save — which makes it harder and harder to achieve the goal of adequate retirement.

Someone has said, “Procrastination is wealth suicide on the installment plan. The math of growing money doesn’t care about your rationalizations or excuses — it’s just math.”

Someone else has said, “When you throw away time, you throw away money.” Many people seek help from advisors about the best retirement investment options. While investment options are important, the amount of money you set aside for retirement is more critical.

The bottom line in all of this: No matter what your age, get started NOW saving for adequate retirement income. The longer you wait, the harder it will be.

---

Don Spencer is Kentucky Baptist Convention Church Financial Benefits Counselor.