Small Retirement Savings Really Do Add Up

Photo: bgottsab

Do you need a million dollars to retire? Or is two million the new one million? It really depends on a number of factors--the number of years until you retire, how long you expect to live, what your fixed expenses will be, how much you expect to receive from Social Security and more. The truth is, it's not easy to estimate how much money you'll need to retire, though there are plenty of online calculators that will help you try.

Personally, when I was in my early twenties, I didn't see much point in saving for retirement because it seemed like even if I saved a few hundred dollars every month until I retired, I still wouldn't have the recommended million-dollar nest egg. Fortunately, I set some money aside every month despite my reservations, and along the way I discovered the power of compound interest, self-employed retirement accounts, 401(k) matches and other tools that have made it easier to save.

Don't let the notion that you'll never have enough money for retirement or that you don't have "enough" to contribute every month prevent you from saving. Even small savings add up, and when the day comes that you choose to or are forced to stop working, you'll be glad to have whatever you've saved, even if you do wish it was more. Everyone always wishes they had more!

For more on this topic, read my Financial Edge article for Investopedia, Why Small Retirement Savings Count. I hope it will inspire you to start saving, or to save just a tiny bit more than you already are.

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