Join co-hosts Tim Regan and Katie Umland as they explore the power of compound interest in retirement planning. Whether you’re starting early or looking to ramp up your savings post-retirement, we’ve got you covered.
Compound interest is a strategy that can multiply your savings over time, allowing you to enjoy a comfortable and secure future. It’s all about harnessing the exponential growth that occurs when your earnings generate even more earnings, building upon each other year after year.
But here’s the thing – compound interest is most powerful when you start early, particularly in your 20s and 30s.
“The way that I like to think about it is every decade that you miss, you have to double the amount that you would have saved from the previous decade,” Regan explains. “So if you wait until your 30s, you have to double your savings to get to the same dollar amount.”
By taking advantage of compound interest now, you can set yourself up for long-term financial stability and security during your golden years – and increase your likelihood of reaching and retaining that two-comma lifestyle.
But that doesn’t mean retirees have joined the game too late – even those in retirement can experience the benefits of compound interest, especially considering that retirement can last several decades.
Plus, Regan and Umland discuss how compound interest extends beyond your savings; it’s also about the accumulation of your decisions and habits over time. Think about it like this:
Positive habits like regular exercise, healthy eating, continuous learning or practicing mindfulness have a compounding effect on your overall wellness. On the other hand, bad habits like procrastination, overeating, or reckless spending have their own ‘compound interest,’ gradually leading to larger problems in the future.
Hit “Play” to learn more about the what and why behind compound interest, or click here to check out our other “Retirement Readiness” episodes.
Key Timestamps and Topics
- 00:03:10 – Tim and Katie discuss the upgrades they have made to the podcast studio, including new chairs and microphones.
- 00:05:05 – Mailbag: Tim explains the benefits of Roth conversions for managing taxes and Medicare premiums in retirement.
- 00:08:36 – Tim and Katie reflect on the importance of taking advantage of compound interest at a young age and how it can greatly impact one’s financial future.
- 00:12:51 – Retirement is not the end, but rather a new chapter in life that can last for 20 or more years. The decisions made during retirement, such as saving and investing, can have a compounding effect on one’s financial security and quality of life.
- 00:13:33 – Retirement is also a time to reflect on past decisions and learn from them.
- 00:14:47 – Just as compounding can work in your favor with investments and savings, it can also work against you with poor financial habits.
- 00:17:48 – Finding Balance and Living in Abundance
- It’s important to find a balance between enjoying the fruits of your labor in retirement and making sure you don’t outlive your savings.
- 00:20:00 – When rates are low, it may be tempting to make larger purchases or take on debt, but as rates rise, those decisions can become costly and negatively impact your financial security
3 Key Takeaways
- Learn why creating a “two comma” lifestyle means living abundantly within your means and making wise financial choices.
- Discover the power of compound interest and how it can multiply your savings over time, giving you the freedom to enjoy a comfortable retirement.
- Gain practical tips on developing small, positive habits and making sound financial decisions that will set you up for long-term financial security and stability during retirement.
Links
Make a Plan with PrairieView
Our team can help you develop savings strategies to support both your long-term retirement goals and your current lifestyle needs. Click here to connect with a member of the PrairieView Wealth team and get started today.
Facebook: https://www.facebook.com/PrairieViewWealthPartners
LinkedIn: https://www.linkedin.com/company/prairieview-wealth-partners/
Website: https://www.prairieviewwealthpartners.com/
Disclosures
PrairieView Wealth Partners, LLC is a registered investment advisor. Information in this message is for the intended recipient[s] only. Please visit our website prairieviewwealthpartners.com for important disclosures.
PrairieView Wealth Partners, LLC often communicates with its clients and prospective clients through email and other electronic means. Your privacy and security are very important to us. PrairieView Wealth Partners, LLC makes every effort to ensure that email communications do not contain sensitive information. If you are not the intended recipient of this communication, please delete and destroy all copies in your possession, notify the sender that you have received this communication in error, and note that any review or dissemination of, or the taking of any action in reliance on, this communication is expressly prohibited. We remind our clients and others not to send PrairieView Wealth Partners, LLC private information over email. If you have sensitive data to deliver, we can provide secure means for such delivery. Please note PrairieView Wealth Partners, LLC does not accept trading or money movement instructions via email. Please visit our website prairieviewwealthpartners.com for important disclosures.
Please remember to contact PrairieView Wealth Partners, LLC if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, or to modify any reasonable restrictions to our investment advisory services. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.
The information provided herein is for informational purposes only and does not constitute financial, or legal advice. Investment advice in an advisory capacity can only be rendered after delivery of PrairieView Wealth Partners, LLC’s disclosure statement (Form ADV Part 2) and execution of an investment advisory agreement between the client and PrairieView Wealth Partners, LLC.
