Save Early, and You'll Be All Right
It's too late for the rest of us. But if you're in your 20s and 30s, take my advice: Save like crazy now -- and the decades that follow will be a financial breeze.
Folks often stagger through life, forever struggling to pay for their next financial goal. Upon entering the work force, they first look to buy cars and houses. Next, they turn their attention to raising kids and putting them through college. Finally, in their 40s and 50s, they focus on retirement, rushing to salt away enough money over their last 15 or 20 years in the work force.
But this lifetime financial scramble can be avoided, if you dig deep and save fanatically in your 20s and 30s. Here are just some of the rewards that come with starting early.
Getting Ahead
It's stressful to live paycheck to paycheck, worrying about how you will cope with the next big expense. My recommendation: Get the stress over and done with while you are young.
If you can amass a decent chunk of change in your 20s and 30s, you will buy yourself a lot of financial breathing room. Indeed, once you hit your 40s, you may be able to scale back on retirement saving and instead use the cash to buy a second home, take more lavish vacations or help your kids financially. Alternatively, you could continue to save like crazy and possibly retire in your 50s.
To understand the advantages of starting early, suppose you sock away $4,000 every year beginning at age 22. To keep it simple, assume there is no inflation and that your investments earn 4% a year. Sure, 4% might sound low. But that would be a handsome return if the purchasing power of your money wasn't under constant attack from inflation.
By age 45, your $4,000 a year would have grown to over $152,000, according to Baltimore's T. Rowe Price Associates. If you then stopped saving but your $152,000 continued to earn 4% annually, your portfolio would balloon to almost $334,000 by age 65.
Depending on whether you will receive a company pension and how much you will get from Social Security, you might need to continue saving, so you have more than $334,000. Nonetheless, you would be in far better shape than folks who start saving for retirement at age 45. They would need to sock away almost $10,800 every year to accumulate that same $334,000.
All this assumes you can find $4,000 a year to save, starting at age 22. Clearly, that isn't easy, especially if you are also trying to rid yourself of college loans, raise kids and save money for a house down payment.
Still, suppose you get out of college and land a job paying $30,000 a year. If you sock away 9% of your income, or $2,700 a year, in your employer's 401(k) plan and the company matches your contributions at 50 cents on the dollar, you will be saving over $4,000 a year.
Trimming the Tab
As one of my e-mail correspondents recently commented, "everything costs more when you're poor." If you start saving when you are young, you won't just benefit from years of investment compounding and years of tax-deferred growth in your retirement accounts. You will also avoid a slew of damaging costs.
For instance, if you quickly pile up savings, you could make a 20% down payment when you buy your first house, thus bypassing the cost of private-mortgage insurance. Similarly, when you purchase a car, instead of leasing the vehicle or taking out a big auto loan, you can put down a healthy hunk of cash and borrow little or none of the purchase price.
Your financial cushion may also allow you to raise the deductibles on your auto and homeowner's insurance, because you figure you can handle larger losses. Once you have a decent-size nest egg, you might go even further, ditching your life insurance. And thanks to the cash you have on hand, you can pay off your credit-card balance every month, thereby avoiding those outrageous finance charges.
In addition, your financial cushion may give you the confidence to take greater investment risk. Instead of sticking with savings accounts and certificates of deposit, you might venture into stocks and bonds, which should deliver higher long-run returns.
Before long, all these financial advantages will start to snowball. Your wealth will grow ever faster, as you find yourself on a virtuous cycle of falling costs, rising savings and impressive investment returns.
Calling It Quits
Lots of folks dream about taking early retirement. But sometimes, it comes a little too early.
It's pretty clear there is a fair amount of subtle and not-so-subtle age discrimination, with many companies aiming to shed older, higher-paid employees. What if you get laid off in your 50s? If you had put off saving for retirement until the end of your career, you could find yourself in deep financial trouble.
On the other hand, if you start saving early, you should be in decent financial shape, even if you do suddenly get laid off. In fact, you may be able to opt for early retirement.
Want to quit the work force at, say, age 55? It's awfully tough to accumulate a big-enough retirement nest egg by that age.
After all, not only will you have to make do initially without Medicare and Social Security, but also you are looking at paying for a retirement that might last 30 years or more.
As a rule, you can generate maybe $5,000 a year of pretax retirement income for every $100,000 saved. For instance, if you want $35,000 in annual income from your portfolio, you will need a $700,000 nest egg. Want to amass that sort of money by your 50s? You really need to start a heavy-duty savings program by age 30, or preferably earlier.
今日积极储蓄 明日高枕无
虽然对于我们这辈人来说已经太迟了，但如果你正值二三十岁，还是采纳我的建议吧：从现在开始拼命储蓄，今后几十年在财务方面就高枕无 了。
人们往往一生茫然行事，永远在为实现下一项财务目标苦苦挣扎。步入工作岗位后，他们先要买车买房，之后将注意力转向孩子的抚养和直到大学的教育费用。最后，到了四五十岁，他们将关注的焦点放在退休金上，在此后的15-20年工作时间里忙著为自己积攒出足够的养老金。
但是，如果你深刻挖掘储蓄的潜力，在二三十岁时疯狂积蓄，这种终生的财务被动状况是可以避免的。以下列举的不过是及早动手储蓄的几条好处而已。
变被动为主动
每月完全依靠工资的日子不好过，时时要为应对下一笔大的支出发愁。我的建议是，在年轻时把这个问题解决掉。
如果你在二十多岁和三十多岁时攒下了相当大一笔钱，在用钱方面就有了很大的回旋余地。不错，步入不惑之年后你可以缩减养老金的储蓄，而用手中的现金再购置一所房子，参加更奢华的旅游度假活动，或是对子女予以资金上的支持。但是如果你继续积极储蓄，在50多岁时就能退休了。
为了理解储蓄要趁早动手的好处，设想你从22岁时开始每年储蓄4,000美元。为了便于计算，我们假设不存在通货膨胀因素，还假设你的投资每年增值4%。的确，4%听起来似乎很低，但如果你的储蓄没有时时受到通货膨胀的打击，从长期来看你也会获得一笔相当可观的回报。
根据巴尔的摩T. Rowe Price Associates统计，到45岁时，你的每年4,000美元储蓄将增长到15.2万美元以上。如果你在那时不再继续存入，而这15.2万美元每年继续增值4%，到65岁时，你的资金将增长到近33.4万美元。
根据是否享受公司提供的养老金，以及获得的社会保险金额状况的不同，你可能需要继续储蓄。这样，你的资金就不止33.4万美元了。尽管如此，你的状况也比从45岁才开始积攒退休金要好得多了。如果从45岁才开始，每年要拿出1,0800美元才能在65岁时攒到同样的33.4万美元。
以上这一切的前提是你从22岁起每年能省下4,000美元。这显然不容易，特别是在你还要清偿助学贷款，抚养子女并支付房子首期付款的情况下。
当然，如果你大学毕业后找到了一份年薪3万美元的工作，每年在401(k)计划中存入9%，也就是2,700美元，公司对你存入的每1美元补贴50美分，你一年的储蓄也超过4,000美元了。
节省开支
正如一个和我通电子邮件的朋友最近说的："对穷人来说，每件东西价格都过于昂贵。"如果你在年轻时就开始储蓄，不仅能受益于多年累积的投资收益和退休金帐户延迟交税带来的优惠，还能避免许多有害无益的花销。
举个例子说，如果你迅速累积了大量储蓄，就能在购置第一处房产时支付20％的首期付款，从而避免了私人房屋抵押贷款保险的支出。同样，如果你购买一辆汽车，就可以痛快地掏出一大笔钱，只借很少的一部份或根本不用借款，而不必租车或者承担高额的汽车贷款。
储蓄还有助于减免汽车和房主保险的费用，因为你有了应对更大损失的能力。一旦拥有了规模可观的储蓄，你甚至不必购买人寿保险。由于手中有充足现金，你每月都可偿清信用卡上的借款，从而避免那些可恶的财务支出。 另外，有储蓄金做后盾，你还能更放心大胆地进行投资。你可以在从长期来看回报更高的股票和债券市场冒冒险，而不必死守储蓄帐户和大额存单。
不久以后，所有这些好处都开始像滚雪球一样越滚越大。由于身处花费下降、储蓄增加、投资回报可观的良性循环中，你的财富将得以更迅速地积累。
潇洒退休
许多人梦想著早日退休，但有时候，这个日子未免来得太早了些。
不同程度的年龄歧视显然大量存在，许多公司在裁员时都瞄准了年龄较大、薪水较高的员工。如果在50多岁时被裁掉了该怎么办？假如你从快退休时才开始储备退休金，就会深深陷入财务困境。 然而，如果你早些开始储蓄，就会处于良好的经济状况，即使突然丢了工作也不必担 。实际上，你有可能更期望早些退休。
你想早一些就退休吗，比如在55岁？要想在那个年龄积攒足够的退休金实在太困难了。
不要忘记，你不仅要设法应付没有政府医疗保险(Mediacare)和社会保障的生活，而且还要想办法支付可能长达30年，甚至更长时间的退休生活费用。
一般来说，通常每储蓄10万美元，你每年能支取的税前退休金收入大约为5,000美元。比如，如果你希望退休后每年支取3,5000美元，就需要有70万美元的积蓄。希望在50多岁时就攒够这么多钱吗？那么你就需要从30岁时开始实施大量储蓄的计划，而且当然越早越好。
