Now that you have your retirement plan started, it is imperative to continue being intentional and pay yourself first. Let’s look back at Billy and see how he can be making $15 an hour or $31,200 a year, and if he would invest half of his pay increases and continue investing till he was 67, he would have over a million dollars. Even though it just cost him $748.80 the first year.
Let’s assume that Billy has a cost of living increase with his pay rate of 2% each year. Hopefully, he has some larger increases for promotions, but we will use 2%. Billy starts his journey at 30, and for 12 straight years, he increases his contributions by 1%. Billy decides at 43 that he wants to enjoy his pay increases a bit more and stays put at 15% of his pay going into his retirement plan. If Billy keeps contributing 15% till he is 67, he will have 1.18 million dollars in his retirement account.
Imagine starting this younger than 30. If you are in your 20’s, what are you waiting for? Your money will work even harder for you with the extra time. When you find a way to make additional income or receive larger pay increases, that can boost your savings as long as you are intentional about saving them. Stay focused and deliberate; you can do this.
