Even a small boost in your retirement savings can have a big payoff.

The trouble is that most Americans don’t even try to nudge up the amount they save. Most find it difficult to save anything for retirement. A whopping 75% confessed to the National Institute on Retirement Security in February that they find it harder and harder to prepare for retirement. Many people feel that they can’t afford to kick in more to their retirement savings. “And many people don’t bother trying to increase their savings by small amounts,” said Brandon Krieg, CEO of Stash, an automated investing platform. “They think it’s not worth it.”

But they’re wrong. That is, unless you don’t think $ 173,000 is worth the bother.

That’s how much you can add to your retirement savings by socking away just an extra $ 20 a week. Say you start in your twenties. Forty years later, if your retirement savings account averages a modest 6% annual rate of return compounded quarterly, you’ll have nearly $ 173,000 from those $ 20 a week additions to your retirement savings.

$ 41,600 of that will be your contributions. The rest will be investment earnings.

And that’s at a rate of return well below the actual 10.08% average gain by large-cap stocks from 1926 through April 30 of this year. Small-cap stocks soared 12.09% a year on average in that span.

If you’re already saving, say, $ 100 week, that money will mushroom into nearly $ 865,000 after 40 years, including $ 208,000 of your contributions.

And what if you’re closer to retirement?

Many people don’t think it’s worthwhile to boost their savings by, say, $ 20 a week if they’ve only got 10 years before retirement. But even that small amount grows into $ 14,321 after 10 years.

And if you can save for, say, 20 years, those $ 20 weekly contributions will grow into $ 40,300.

Again, that’s in addition to whatever you are already socking away. For example, if you are already saving $ 100 a week for retirement, at 6% average annual growth that will become $ 71,606 after 10 years. It will rocket into more than $ 201,500 after 20 years.

It will morph into $ 437,134 if you let it grow for three decades.

The lesson is simple. With your children, the sooner you get them started saving, the better. And don’t put it off just because they can only afford to save a small amount. “Have your children start small,” Krieg said. “Have them open a savings account. Get them to start a retirement account. Even small contributions can add up over time.”

The same applies to adults. “Even if someone thinks they can’t afford to save much more, contribute a small amount. You can increase your savings once you find ways to cut back on spending or once you get a pay raise.”


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