Invaluable finance lesson!!!

[RAM]

Some of you definitely know this, but others don't particularly the younger folks. Studies have shown that for someone 18 years old who contributes the maximum to their 401(k) up until they turn 21 will actually have more money in their retirement account than someone who BEGINS saving at age 21 and continues until their retirement!

I bring this up because it's an issue that nags at me, personally. My grandparents were retired at 65 due to mandatory retirement. That was in 1973. They didn't expect to live well into their 90s (my grandmother was just shy of 98 when she passed) and was living off my parents' savings at that point! They couldn't afford all the niceties they enjoyed while my grandfather was working: my mom and her brother both had new cars at age 16, they had a live-in maid, had a big beautiful house in the suburbs, etc...by 1980, they couldn't even afford a home! They rented, lived paycheck-to-paycheck, and had very expensive medical issues!

The point I'm trying to make is to reiterate a lesson many have repeated before me: save for your future! You never know what you might need and when, or how things will turn out.

I hope someone gets something valuable out of this, but if not, at least I'm not in another thread causing trouble, right?

[vene-nemesis]

You started the thread talking about obama, youre causing trouble at this thread

[Joe Gress]

+1 To the OP's point.

[Hawaii Islander]

In order for your idea to work, the people involved need to have a job that pays enough to cover expenses and leave enough extra cash to put into a retirement account. Fewer people these days have that luxury. Hopefully things will improve in the near future.

[hbarcat]

Saving money for the future and retirement is all well and good but I've been seeing tons of stories in the news these days that economists are advising everyone to stop saving our money and get out there and spend to "stimulate" the economy.

So which economists are we supposed to be listening to?

[Joe Gress]

Originally Posted by hbarcat

Saving money for the future and retirement is all well and good but I've been seeing tons of stories in the news these days that economists are advising everyone to stop saving our money and get out there and spend to "stimulate" the economy.

So which economists are we supposed to be listening to?

Saving. Let the others with money do the economy boosting. I'm greedy.

[7StringBassist]

you swear that people at 18 save ha

[Unrepresented]

Originally Posted by hbarcat

Saving money for the future and retirement is all well and good but I've been seeing tons of stories in the news these days that economists are advising everyone to stop saving our money and get out there and spend to "stimulate" the economy.

So which economists are we supposed to be listening to?

Investing it retirement accounts is somewhat akin to spending. It's not as direct, but eventually the money has to keep moving in order to earn interest.

But, short answer: on a personal level we should be saving, on a national level we should be spending.

[JonathanD]

Spend it and die early.

[Dr. Cheese]

I agree that saving needs to be habbit that is developed early. It is really easy to get in debt over BS, which will then make it difficult to save anything. On top of that, life has a way of slipping up on you. One day you are thirty, and you can still be mistaken for a college kid. Then you wake up one morning, and you realize that you are closer to retirement than you are to the start of your career.

[hbarcat]

Originally Posted by Unrepresented

But, short answer: on a personal level we should be saving, on a national level we should be spending.

I see your point. I should save my money for the future but the government should be spending its money to stimulate the economy now.

Except that I don't have any extra money to save. Taxes took all of it.

[Unrepresented]

Originally Posted by hbarcat

I see your point. I should save my money for the future but the government should be spending its money to stimulate the economy now.

Except that I don't have any extra money to save. Taxes took all of it.

And services, goods, and employment were likely redistributed to you and others as a result. It's the circle of life.

[Eric Perry]

I was a Psychology / Counseling major (because I'm retarded). Therefore, I don't make enough to save a damn thing.

[LCW]

Originally Posted by 7StringBassist

you swear that people at 18 save ha

I am 19 and have almost 20,000$.

How? i worked , i saved and i live with my father who is unemployed thus i get financial aid that pays for my tuition and books. I dont drive anymore its a waste in my eyes. I also pay 300$ a month rent abd my own food/phone bills.

At 18 i had around 12000$ so yes young people save,

[Kwesi]

Originally Posted by 7StringBassist

you swear that people at 18 save ha

I do .

[tplyons]

Started my 401k after college, at 22 years of age. 18% of my paycheck goes in there every week and it's adding up quickly. Compound interest is a wonderful thing!

[anyonefortennis]

Originally Posted by tplyons

Started my 401k after college, at 22 years of age. 18% of my paycheck goes in there every week and it's adding up quickly. Compound interest is a wonderful thing!

Started at 21 - but can barely afford 6%

[Staccato]

In this day, if you have a 401k that is funded at the maximum rate allowed, and you save 10% of your check, you're in the minority for sure!

OP was right, plan and save!

[-Kramer-]

Just to make a minor point, the 401(k) contribution limit is $16,500 for anyone under 50 in 2009. To make that kind of contribution at ages 18-21 is fairly unrealistic. I would bet that most workers never get to a point where they can max out contributions.

BUT the OP makes a great point.

[CamMcIntyre]

Sounds great.

Once I get my consumer debt paid off, that has been one of my goals. Take the same amount I'm paying each month on my credit cards ($60-800) and saving it.