This week we are talking retirement. Every day we will post retirement advice from NerdWallet on the various stages of life. Today, we are starting off with the younger set. If you are in your twenties or have a child in this age group, listen up! Retirement may seem far away but this is the ideal time to start preparing.

There’s one truism about retirement that has stood the test of time: It’s never too late, or too early, to start saving. Whether fresh out of school or winding down in a career, there are things you can do to successfully prepare your nest egg, as well as places where it’s easy to stumble. Financial institutions such as Vinton County National Bank can help you set up a retirement account and personalized plan. But it’s up to you to do the heavy lifting throughout the decades.

By Cait Klein, NerdWallet

Albert Einstein once declared, “The most powerful force in the universe is compound interest.” But you can capitalize on the magic only if you start early and stay consistent. The earlier you begin, the more time there is to maximize returns, giving the account time to grow into a significant sum. Here’s an example. Assuming a four percent return, if you were to fund $5,000 a year in a Roth individual retirement account starting at the age of 20, by 65 you’d have a nest egg of approximately $660,000 from an investment of $230,000. But if you put it off until age 30, it would require annual savings of $8,400 to get the same end amount. And you can usually withdraw the earnings tax-free when retirement rolls around.

Habits are hard to break for better or for worse, so make sure the financial ones you develop early on are good. After having a great decade of fun and splurging, it can be hard to change your behavior and start saving. Get used to putting away a steady stream of funds in your youthful years, so that doing so for the rest of your life won’t be so hard.

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