If you are over the age of 30 and haven’t taken any steps to start saving for your retirement, it’s time to get moving. While most people understand the importance of building a nest egg for their retirement years, many fail to recognize how crucial it is to start as early as possible. When you are young, of course, it seems like you have plenty of time to get serious about retirement planning. In reality, however, you can’t start soon enough. Although it is true that younger people don’t tend to have much wiggle room in terms of finances, investment experts like Chris Linkas insist that there is still a lot that they can do to lay the foundation for a terrific eventual retirement.
Given his extensive experience in the investment world, it makes sense that Chris Linkas is known to stress the importance of preparing for retirement early. More than most people, Linkas understands the incredible power of compound interest, which can transform a modest yearly contribution into a sizeable nest egg–but only if you start early enough. Like many investment experts, Chris Linkas has heard all of the excuses from young people about why they aren’t worried about retirement just yet, and he can quickly shoot down every one of those excuses based on his own proven experiences in the investment and retirement planning realms.
Of course, even with his exceptional pedigree, you don’t have to just take Chris Linkas’s advice at face value. Instead, keep reading to learn about five compelling reasons to start investing for retirement as early as possible.
5 Reasons to Start Investing for Retirement as Early as Possible
Sure, it probably seems like you have all of the time in the world to get your ducks in a row for your golden years. Before you know it, however, retirement will be looming on the horizon; will you have invested enough by then to live comfortably? You almost certainly will if you were wise enough to start while you were still a young adult. Here are five reasons to get serious about investing before it’s too late:
- You Will Be Ahead of the Game from Square One
When you’re still a young adult and not earning very much, setting aside money for retirement can almost seem like a type of punishment. After all, this is when you are supposed to be out having fun and exploring the world, right? Chris Linkas, who has been in charge of a 20-person European credit group team since 2012, emphasizes to young adults that being disciplined now will pay off for them much sooner than they probably realize. Being proactive about retirement investing forces you to be more disciplined about finances in general, so you will enjoy more financial stability from a younger age than many of your cohorts.
- You Will Be Able to Take Risks That Can Really Pay Off
Through the years, Chris Linkas has gained extensive experience in many investment-related areas. One thing that he can attest to is that when it comes to investing, increased volatility typically produces higher yields. Put simply, the bigger the risk, the better the payoff is likely to be. Not surprisingly, older folks tend to shy away from risky investment activities because the clock is really ticking by that time. If something goes awry, there’s very little time to make up for it. While you’re still young, then, don’t be afraid to take some risks–but make them educated risks, and work with an experienced investment advisor before making any moves.
- You Will Enjoy a Better Quality of Life
Instead of putting money toward retirement in young adulthood, many people squander what little extra earnings they make on big-ticket items and pointless purchases. This sets the stage for a lifetime of living paycheck to paycheck. On the other hand, becoming disciplined about saving for retirement at a young age means being disciplined regarding finances in general. You will value the money that you earn more, and you will be better able to buy nice things later. When Chris Linkas graduated from Bowdoin College in 1991, he was thrust into the world of the Savings and Loan scandal and resulting crisis. In those tough financial times, Linkas was forced to be more disciplined–and it has paid off well for him through the years.
- You Will Have Better Spending Habits
By setting a major goal for retirement investing at a young age, you will find it easier to keep your eye on the prize, so to speak. Whenever you are tempted to make an impulse purchase, you will be likelier to realize that the money is better off being put into a 401(k) or Thrift Savings Plan. You will also be more inspired by investment entrepreneurs like Chris Linkas, who jumped directly into roles as an analyst and asset manager after earning his degree. After returning to RER Financial Group, LLC, to serve as vice president, Linkas was personally responsible for a book balance of more than $4 billion within an 18-month period.
- You Will Benefit Enormously from Compound Interest
Compound interest, which essentially means earning interest from interest, is one of the most powerful ways to grow retirement savings. However, it only produces amazing yields when it can continue for very long periods of time, so it’s crucial to start at a young age. In his current role as Managing Director and Head of European Credit for a UK-based investment firm, Chris Linkas no longer advises people directly on such matters. However, when asked for advice, he emphasizes that compound interest only makes a major difference when people start saving while they are still young.
To put this into perspective, here’s a quick example. A 25-year-old who puts $2,000 in a 401(k) every year for 10 years–at an average growth rate of 10 percent–will have more than $550,000 at age 65. By comparison, someone who starts contributing $2,000 per year for 30 years will only have around $330,000 at age 65. Even though they invested for 20 years more than the other person, they come away with far less (Observer).
You don’t have to be able to work with an experienced investor like Chris Linkas to set yourself up for a great retirement. He has gone on the record many times stating that for best results, it pays to start saving for retirement early. Given his experiences at prestigious firms like Goldman Sachs, where he served as vice president in a commercial mortgage joint venture, it is safe to say that Linkas knows what he is talking about. If you heed only piece of advice from the investment entrepreneur, make it to start investing for retirement right away.