Save Now, or Die Old and Broke

For example, say you plan to retire in 20 years and you need to decide whether it is really all that important to start saving now. You have an extra $5,000 a year that you could sock away in a mutual fund (or some other investment instrument) that earns an average of 8% per year.

If you start now and save $5,000 a year for the next 20 years, you would end up with $247,115. Wait just two years and that final number drops down to just $202,231.

That's losing out on $44,883 of savings from just $10,000 worth of investment.

And the longer you have to save, the more that $10,000 has time to grow. If you have 25 years until you retire instead of 20, starting now rather than waiting for two years will net you an additional $65,948.

If you don't have any room in your budget for savings, then work to free up a few bucks as soon as you can. Starting to save now can make a big difference down the road.

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