Starting Early, Starting Late

I have saved most of my life.  My brother used to tease me when I was quite young.  We would receive a dollar on Monday from mom for our allowance and by the end of Monday his dollar was gone.  By Friday, I still had my dollar in my pocket.  Nevertheless, I have managed to spend money on things I need and don't need, gotten in to debt when I shouldn't and taken money from my retirement when I should have left it alone.  The mindset was there, but sometimes it is difficult to see so far in the future.  Now that I am nearing retirement, or at least the age when I would like to retire, I see that living comfortably will be a challenge.  Where would I be if I had not spent my retirement?  When is the best time to start saving?

The best time is as soon as possible.  Not tomorrow, not next year.... Now.  Here is an example.  Mr. Early Starter decides to save $300 a month every month for 7 years and is able to get 8% interest.  Where as Ms. Start Later puts off saving until she turns 32.  By the time they are both 48, they end up with just about the same amount of money.  But Mr. Early only invested $25,200 whereas Ms. Start Later had to invest $61,200 or over double the amount.

Early Starter				Start Later
Age	Annual Contribution	Total Accumulation		Age	Annual Contribution	Total Accumulation
25	3,600	3,888		25
26	3,600	8,067		26
27	3,600	12,622		27
28	3,600	17,520		28
29	3,600	22,809		29
30	3,600	28,522		30
31	3,600	34,692		31
32		37,467		32	3,600	3,888
33		40,465		33	3,600	8,067
34		43,702		34	3,600	12,622
35		47,198		35	3,600	17,520
36		50,974		36	3,600	22,809
37		55,052		37	3,600	28,522
38		59,456		38	3,600	34,692
39		64,212		39	3,600	41,355
40		69,349		40	3,600	48,552
41		74,897		41	3,600	56,324
42		80,889		42	3,600	64,718
43		87,360		43	3,600	73,783
44		94,349		44	3,600	83,574
45		101,897		45	3,600	94,148
46		110,048		46	3,600	105,567
47		118,852		47	3,600	117,901
48		128,361		48	3,600	131,221
	Total Spent   25,200				Total Spent 61,200

If you are my age, it all looks quite overwhelming, but if you are younger, I suggest you give serious though to beginning a savings plan now.