Explore Your Retirement
See What Time Can Do
In my book, I compared two people who each saved $200 from every paycheck, one starting at twenty-five and the other at thirty-five. Try that example, or your own numbers, and see what a decade can do.
Try an example:
First saver
Second saver
| At age 65 | First saver | Second saver |
|---|---|---|
| Years of saving | ||
| Total contributed | ||
| Value at 8% (the rate in my book) | ||
| Value at 6% (more conservative) |
This is a hypothetical illustration of how compounding works, not a projection of what any investment will earn. It assumes contributions every two weeks, twenty-six a year, through the ending age you choose, a constant rate compounded every two weeks, and all earnings left invested. It does not account for taxes, fees, or inflation. Actual returns vary, and investments can lose value.
The full example, and the habits behind it, are in The Wealth You Build: A Lifetime of Financial Wisdom.