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January 22, 2024

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V O L . X X X N O. I I JA N UA R Y 2 2 , 2 0 2 4 20 W E A LT H M A N A G E M E N T / R E T I R E M E N T According to Fidelity's guidelines, people plan- ning should aim to save at least one times their salary by 30, three times by 40, six times by 50, eight times by 60, and 10 times by 67. When should people in their 20s start saving? It's never too early to start, says Gerrit Petersons, a financial advisor at Robinson Smith Wealth Advisors LLC, which has offices in Portland and Portsmouth, N.H. How much money people need to save for retire- ment will vary but by investing today, with the effects of compounding and the time value of money, you may alleviate the need to save even more in your 40s or 50s in an attempt to catch up. "ere are studies out there that show an inves- tor who begins saving at 25-years-old vs. someone who starts at 35-years-old and the differences in the balances when they save the same amounts, just starting later," says Petersons. "Balancing any student loan or credit card debt can make saving seem like a lower priority but there are incentives to save that people can take advantage of, whether it is a tax break or a company match, and it can add up and be more effective than paying off all of your debt," he adds. How to get started Nate Moody, a retirement plan advisor partner at Falmouth-based Lebel & Harriman, says the key to getting started is to just start. When you are young, time is your most powerful resource when saving for retirement. ere's a reason Albert Einstein said, "Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it," says Moody. ose looking to start a retirement fund should check if your employer offers a retirement plan and if so, see if it offers a match. at is free money, do everything you can to take advantage of it. If they don't offer a retirement plan, consider starting an Individual Retirement Account (IRA). In addi- tion, the state of Maine is rolling out the Maine Retirement Savings Program in 2024. is will make it easier than ever to start saving for retirement if your employer doesn't offer a program. How much is the right amount Katie Brann, a financial advisor at Golden Pond Wealth Management, says people in their 20s should start saving as soon as they get their first paycheck. e earlier you start investing, the longer your money has the opportunity to grow. "Don't wait until you are 'settled' and have bought a house, gotten married, started a family, etc.," says Brann. "It will not be easier then. Instead, use your 20s to create good financial habits and set yourself up for the future." A commonly used rule of thumb is save 10% of your income annually for retirement, says Brann. Committing to this in your 20s is a great way to jump-start your retirement fund. Contributing a fixed percentage to retirement means your annual contribution as a dollar amount will go up if you receive annual raises or cost of living adjustments, which is a good thing. in your 20s F O C U S Don't wait until you are settled and have bought a house, gotten married, started a family, etc. It will not be easier then. Instead, use your 20s to create good financial habits and set yourself up for the future. — Katie Brann Golden Pond Wealth Management Katie Brann, financial advisor at Golden Pond Wealth Management F I L E P H O T O / T I M G R E E N WAY Strategies to help you take the first step B y A l e x i s W e l l s RETIREMENT PLANNING N avigating your 20s can be difficult especially when it comes to knowing the ins and outs to plan for your future. Retirement may seem far away but the time to start saving is now. Mainebiz spoke with experts in the finance indus- try on how to start saving in your 20s. Here are some tips so you can feel less overwhelmed while starting to plan for your future.

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