How a Delay of Just One Year Affects Your Retirement Savings

Public Servant Student Loan Forgiveness delays
June 18, 2021
Retire with Money
Retire with Money
At the beginning of my career, I made so little that I didn’t participate in the 401(k) of the small community newspaper where I worked. In hindsight, I could have contributed $25 a month. That was before I knew much about personal finance, and I didn’t appreciate how even a slight delay could set me back— and how just a little savings could compound quickly. Today’s featured story does the math: If you start saving at 25, you’ll have $23,000 more at age 65 than if you start at 26 (assuming a 4% return after inflation). While compound interest works best if you begin early, if you’re getting a later start, you can boost your contribution rate to make up for lost time. It’s never too late to start saving for retirement, and something saved is always better than nothing saved. 

Best wishes,
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Timely Retirement News, Insights, And Advice

Many forces are driving down the birth rate, a trend that began before the pandemic.

Eligibility criteria for the Public Service Loan Forgiveness program are confusing.

Retire With Money Community News

Please help me welcome our reader of the week! Stan Alcott, 70, lives with his wife, Lori, and their 11-month-old Parti-Yorkie terrier, Lexie, in The Woodlands, Texas. The couple has been married for 14 years, since their local Houston ABC -TV station matched them in a city-wide Valentine's Day contest. Stan worked in management for Home Depot and other companies and was also a Captain in the U.S. Army. Lori worked as a director of contracts at a major natural gas pipeline company.
What are you up to these days? 

We just refinished our house from the February freeze that caused pipes to burst and flood the house. Looking forward to getting back to normal life and the frequent trips that we have missed taking due to Covid-19. Since our gym had to close down last year, we are hoping to learn how to play pickleball and to stay active by exercising, watching all college sports and NASCAR, working in my yard, walking our 11-month-old Parti-Yorkie, riding bikes and being with friends. I enjoy reading investment/retirement articles and Lori likes working in her new sewing/hobby room she just finished, riding her elliptical bike for miles, and training her tomboy puppy.

Nice! Any advice you'd like to share for others about preparing for/living in retirement?

Save early and as much as you can (at least to get your employer's max match), don't borrow from your 401(k), stay diversified through low fee ETFs, plan ahead for setbacks and living a long life if you are so blessed, always know your true net worth and don't get caught up in the FOMO/ get rich quick schemes/ meme hype. Educate yourself, get a great and trusted CFP, CPA and estate attorney, have no debt, get a one-story house where you can age in place. 

Plan ahead before you retire and fix your home up so that it will meet your needs as you age (pay for this before you retire). Before my wife retired, we replaced our roof, our air conditioner, updated our kitchen, purchased a whole house generator, and updated as many big-ticket items as we could think of. My wife and I review our budget monthly to see where we have spent our funds and discuss ways we can do better in the future. This way, if something should happen to one of us, the remaining spouse will have a full understanding of our monthly bills, etc.

Smart! Any regrets you’d like to share?

 I wish Lori and I had not purchased a flexible premium deferred fixed annuity! (Remember, some advisors are only out for their commissions).  As you age, your agility and mobility will diminish, so don't purchase a home with a steep driveway. Never buy a timeshare and don’t get another car every two years. Don’t buy the extended warranty, either.

Retirement News From Around The Web

The Supreme Court Declines to Overturn the Affordable Care Act — Again
By a vote of 7-2, justices overturned the third challenge to Obamacare in nine years, saying it had no merits. KAISER HEALTH NEWS

58% of Men Were Able to Continue Saving for Retirement During the Pandemic—but Only 41% of Women Were
A new study sheds light on how the pandemic altered the retirement plans of millions of Americans CNBC

Workers Overestimate Their Social Security Benefits
Being overly optimistic about your future benefits can lead you to under-save for retirement. SQUARED AWAY BLOG

Pickleball Injuries: 7 Tips to Avoid Getting Hurt
Losing your balance is perhaps the biggest risk when you play America’s fast-growing sport.  NEXT AVENUE

Elizabeth O'Brien is deputy editor at Money. She has covered retirement and health care for nearly a decade. A Brooklyn resident and mom of two boys, she navigates the alphabet soup of Medicare and the New York City subway system with equal ease. You can email her at and follow her on Twitter at @elizobrien.
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