Saving For Retirement On A Dollar A Day
6 October 2006This one is best for young people or for children, but this article runs the math behind a simple strategy for retirement: save $1 every day from the day you’re born. You’d end up with about $2 million. It’s not that hard to catch up if you’re younger, but it’s nowhere near enough if you’re getting up there in years. I like these kinds of plans because they’re simple and don’t sound that daunting, when actually you’re saving up quite a lot over long periods of time. It’s the same reason insurance companies market products as costing only a dollar a day or some other low amount. You also don’t really have to know all that much about money to do it. This plan also takes advantage of an extremely long period of time for your money to grow.
The downsides? Inflation is a big one, as the article notes – $2 million may well be nothing by the time you retire if you’re born today. Another one is that your child has to keep doing this, and they may not want to. It’s all well and good for the parents to save a dollar a day – but what happens when your kid hits 20 and doesn’t want to put any of his money away? Then again, it can’t hurt to try, and it’s not your responsibility to keep them from making stupid decisions forever.
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