Summer Money Series: Investing in Your Future

Starting out as a young person today isn’t what it was when many of us were young. Straight out of college, you’re paying $300 per month for health insurance, $80 per month for your cell phone, almost three bucks for a gallon of gas – all of this being stacked atop increasingly expensive rental rates, utility bills, car payments, and grocery costs (and stagnant wages).

It comes as no surprise then that many young people choose not to save for retirement … quite yet. But while that decision can give added flexibility in the short term, it can wreak havoc on a person’s financial health long term.

Consider this: If you start putting $100 per week away at age 25, you’ll be a millionaire by 65 – and much of that is money you didn’t have to work for. By investing about $100 per week, you’ll have to turn over around $192,100 in cash over 40 years, but you’ll make about $865,500 in interest during that time. Not bad!

If savings are delayed until age 35 and you put the same amount of money away per week, you’ll have invested about $144,000, but earned just $350,000 in return. That’s an extra half-million dollars in return for just 10 extra years of saving! (These calculations were done by CNBC assuming a monthly savings of $400 with an average 7% annual return through age 65.)

So, where does one start. The first place is taking advantage of your company’s 401k program, should they offer one. Here, you can contribute up to $23,000 per year. Moreover, many companies offer a 401k match, which can help your investments grow exponentially.

Independently, you can open an IRA or Roth IRA. Each comes with different tax rules, so talk with a financial planner about what might be most advantageous for you. Mutual funds, CDs, money markets, and exchange-traded funds (EFTs) also offer investment advantages for many who seek to save outside of an employer-sponsored plan.

I want to be clear: I am in no way suggesting that it is easy to find extra cash when you’re just starting out. It’s tough. I get that. But if it is even remotely possible, the smallest of investments today can make a huge impact on your financial health tomorrow. For more savings tips, please visit