checks you earned during your working career. You will live off these assets. And that’s why it’s so important to start growing them now!
The different types of assets in this bucket grow and appreciate based on contributions you and
your employers add (if your retirement plan includes an employer match), plus the annual growth in the value of the assets.
Now that your research is done, you should be ready to open your first retirement account. Perhaps it’s a ROTH IRA or just a simple savings account until you have enough money to invest in retirement. It doesn’t matter how you do it; the important thing is simply to take the first step. Think about retirement—and then act!
Personal Finance Stories Kim signed up for her employer’s 401(k) plan, and contributes 5% of her paycheck each time she receives one. She also clicked on the setting that allows her dividends and interest to be reinvested, which means that her money will grow even faster. She’s able to monitor the portfolio from her mobile device at any time of the day or night, and she watches the ups and downs of the market carefully. But Kim is in it for the long haul and understands that there are days she might lose some money. Over a 30-year period of investing 5% per month, reinvesting her dividends and interest, and pretty much leaving the account alone, the app projects a decent return - her account will be worth $1,186,253.14. If the stock market does even better than projected, it could be worth $2,129,907.44. And, if she were to save 10% per month, the portfolio would be worth $3,193,476.48. That’s what happens to just a couple hundred dollars a month. As Kim’s income grows, she’ll be adding even more to the account. Starting at this young age, Kim will be in great shape for a comfortable retirement.
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