A recent study done by Wells Fargo Bank showed that people aged 55 to 59 have accumulated 3X more in their retirement accounts than those aged 60-70 in their retirement accounts. What made such a difference in the size of their portfolio?


The simple fact is that the younger group started saving in their retirement accounts 6 years younger than the older group. These younger boomers started saving at 31 years of age instead of 37.

Many people don’t realize how important time is to saving. Simply put, the amount a person ends up at retirement has less to do with how much one puts into their account each year, than does the age at which they start.

In fact, one can put in twice as much as their neighbor each year, but starting just a few years later will mean that the larger contributor will end up with less come retirement.

This is hard for people to understand, no matter how many times they hear it repeated, but TIME is more important than amount when it comes to saving.

So many people think that while they are young and their income is low, that saving a few thousand each year will not have that larger of an impact, simply because the amount they are saving is seen as trivial. The reality is quite the opposite.

Take this example of just one year’s worth of saving:

Saving $3,000 for 40 years at an average return 7%/year will equal $44,923.37

Now take $10,000 for 10 years at an average return of 7%/ year and it will equal only $19,671.51.

Saving more than 3X the amount for a lot less time equals less than half the total amount come retirement.

People are slowly understanding the power of compound interest, but the learning curve needs to speed up, otherwise, millions of people now working are going to come to the end of their working years unprepared.

So, if you are in your 20’s, or know someone who is, this is the time to help them see the value in starting to save.