Don’t Waste Your Money & Time Doing These 35 Retirement Mistakes

25. Starting Your Retirement Planning Too Late

Time is of the essence when it comes to retirement planning. Start even a decade later, and you’ll have to dramatically adjust your monthly contributions to make up for lost time. Take a look at the following scenario of a 40-year-old planning to retire at 65 with a rate of return of 7 percent:

Current principal: $20,000
Monthly addition: $500
Years to grow: 25
Interest rate: 7 percent
Total savings after 25 years: $488,042.88

Here’s how much a 50-year-old can expect to save by 65 with the same parameters:

Current principal: $20,000
Monthly addition: $500
Years to grow: 15
Interest rate: 7 percent
Total savings after 15 years: $205,954.76

In order to save as much as the 40-year-old by retirement, the 50-year-old would need to put aside over $1,400 each month.