22 ADVANCE FOR MEDICAL LABORATORY PROFESSIONALS PROFESSIONALISM Compound interest means the dollar invested today is going to grow to be worth more in 30 years than the dollar invested 10 years from now—because it’s had more time to grow”—Ed Snyder, CFP(r), ChFC FEBRUARY/MARCH 2016 It’s important young workers start saving early so they enjoy the benefits of what Einstein deemed the most powerful force in the universe—compound interest, Matthew Carr, CEO of Quantitas Capital Inc., added. Compound interest means the dollar invested today is going to grow to be worth more in 30 years than the dollar invested 10 years from now—because it’s had more time to grow, according to Ed Snyder, CFP(r), ChFC, Oaktree Financial Advisors, Inc. “It’s no different than if you planted a tree today. It’s going to be taller and fuller in 30 years than if you wait 10 more years to plant it,” he said. “Plant your tree today—no matter how small you have to start.” Don McDonald, principal, education director, Vestory Investment Advisory, provided the following example: Assuming a growth-oriented index portfolio in which an 8% annual return is a reasonable historic return, if you start investing $200 per month at age 25 for the next 40 years in a Roth IRA, you should have over $700,000 at age 65 (after only investing $48,000). If you wait until you’re 40, you would have to save over $700 per month (a total investment of $260,000) to obtain the same results. “The sooner you start, the less you need to take from your current income,” Drury noted. “Just for fun, if our hypothetical 25-year old invested an extra $100 ($300 total) per month, he could retire at 65 with over $1 million (total amount invested over 40 years: $144,000).” There’s a goal to work towards! PAY YOURSELF FIRST One of the biggest hurdles to a successful retirement savings plan is getting started. It can be difficult to look at your budget and carve out extra RELATED CONTENT The 5 keys to a successful retirement for laboratory professionals. More … SAVE UNTIL IT HURTS Don McDonald, principal, education Director, Vestory Investment Advisory, offers the following keys to Roth IRA savings: n start early n save until it hurts n look for funds with no commissions n seek funds with low fees n avoid complex investments n avoid anything someone is selling (no insurance products) n diversify in index funds (or ETFs) if they are offered n leave the retirement money alone
ADVANCE for Medical Laboratory Professionals • February/March 2016
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