Easy changes we can make today for a better retirement tomorrow: Part 2



By Brent Weiss, CFP®, ChFC®

National Retirement Planning Week (April 8-12) offers a great opportunity to discuss what consumers tend to get wrong about investing. This article series discusses three common mistakes that I see as a CERTIFIED FINANCIAL PLANNERand, more importantly, how to correct them. In Part 1, I focused on how consumers often don’t set goals or create a plan for long-term investing. The second common mistake is discussed below.

Course Correction #2: Start investing early to reap the full benefits of compound interest

In Part 1, we discussed the importance of setting goals and creating a plan to achieve them. I recommend you check that article out if you haven’t already to get up to speed. If you have, you are ready to go!

The second opportunity for us to course correct is to start investing as soon as we can. It’s never too late. Even when we recognize the importance of saving and investing for retirement, many of us put off our contributions, because we don’t fully grasp the power of compound interest. Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”

In our defense, there is this thing called LIFE that always seems to get in the way. However, starting early is a critical element of retirement success. For anyone who isn’t currently saving and appropriately investing for retirement, my message is to start immediately. If you’re in your 50s and just getting started? It’s OK! We can build a realistic plan that’s right for you. The important thing is to start as soon as you can.


Ideally, we should start investing as soon as our first paycheck, to leverage the power of compound interest. Ancient Chinese philosopher Lao Tzu said, “The journey of a thousand miles begins with one step,” and that wisdom certainly applies here. Prioritize taking the initial action to invest, even if it’s a minimal amount like 1 percent of your income during the first year. From there, aim to progress to 2 percent the next year, 3 percent the year after that and so on.

Even saving the same amount each year can do wonders if we start early enough. To illustrate this point, Darwin’s Finance conducted an analysis revealing that a 25-year-old who saves $1000 every month until age 35 will have more money for retirement than a 35-year-old who saves $1000 each month until age 65.

The moral of the story? I don’t expect that everyone can save $1000 per month, especially when only 25, but start investing today. Even if it is a small amount because there are other priorities (debt, college, new home, life!), starting early gives our money more time to work for us.

Remember my money mantra: Keep it simple, make it balanced, give it purpose. When you tie your goals to your values, you set yourself on the path to financial well-being and harmony. With Facet Wealth, It’s Possible.


Ready to get going?  Schedule your intro call with Facet Wealth today.

Be sure to read Part 1 of this series, and keep an eye out Friday for Part 3 of this National Retirement Planning Week article series, which will discuss how consumers can course correct by consulting with a financial professional to help them implement and execute effective investment strategies.


Brent Weiss is the co-founder and head of planning at Facet Wealth, a next-generation financial services company offering financial planning and advice to consumers.