I’m 30 and have virtually nothing saved for retirement. Will I be working until I’m dead?

This question and answer originally appeared at Quora.

Update: I’m up to $7,000!

It largely depends on when you will die.

If you live until you are say 100 (which is quite feasible), then you will most likely be physically and/or mentally unable to work.

You really must start saving some money on a regular basis, learn about investing and perhaps try and create a side business to provide extra income.

If you don’t take action today to provide for your future prosperity, you may find that you have to rely on your children. Make sure you don’t outlive your money.

You should have 30+ years to go, so make some sensible financial choice today, but don’t worry about it too much – a lot will change in your life between now and retirement.

You may also feel like only having $7,000 is bad, but it’s a great start, so many in this world are in debt, and so many more earn so little they will struggle to save that in a lifetime.

You have a good base to start from; but it’s always best to save as much as you can as soon as possible as compound interest is more powerful the longer it is able to work.

You will also most likely feel like you are making no real progress for 10 years or so, but this is normal. a Graph of compounding returns looks as follows:

This is a chart showing the growth of £10,000 if you achieve a 7% pa compounded investment return. This should illustrate how compounding of returns has a greater impact the more money you accumulate.

It also shows that when you are halfway there, you will feel like you are still a long way away from your goals.

Save as much as you can now, learn about investment risk, invest wisely in a diversified manner, minimise taxes, maximise tax breaks and make sure you don’t pay too much in fees.

I’ve added some links in the answers to some of my earlier articles that you should find helpful for building your general understanding (although my content is UK specific, not the US). The most important thing is your own behaviour and how much you can save.

I hope this helps you and good luck.

This answer first appeared here.

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Mark Underdown

Financial Coach, Small Acorn Money

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