There are roughly 62 million wage and salaried women between the age 21 and 64 who are working in the United States. However, even before the economic trouble and high unemployment, only45 percent of the employed women participated in a retirement plan. Many people don’t realize the importance of compounding which simply means the earlier you start, the less you need to save and the more you will have. Remember, even small amounts can earn interest and add up over time.
If you are waged and your employer doesn’t have a retirement plan, you can open an IRA. Start by talking to your bank and open an IRA account. Most of them have a very small minimum requirement. You can put in very little each month. Try to setup a small amount that you truly feel comfortable and stick to it and forget about it. If you have a land phone line that you don’t really need at home, cancel it and use that money to fund your IRA.
If you are 25 years old right now, open your Roth IRA with $250 down and put in $50 each month until you’re 65. At 8% of interest, you will have $173,300 of tax free money when you’re 65. You can’t retire happily on that, but if you have other investments, and social security checks, you can be comfortable. Plus that’s just the savings from your land line phone bill. How can you beat that? With the same calculation, image yourself skip movies, shop second hand, skip Starbucks and manicure and put in $200 each month, with everything staying the same, you will have $676,906. Now you can really live comfortably with that on top of your social security checks.
Now how about skip lunches and bring your own sandwiches, at $7 a day, you can probably invest another $150 each month. Now the monthly contribution is $350. At 65, you will have $1,180,511. Congratulation!