Even though Americans’ net worth still hasn’t fully recovered from the Great Recession of 2007-2009, many continue to dream of retiring early. A 2019 survey by the reverse mortgage company American Advisors Group found that 52% of Americans plan to exit full-time employment before age 65. Not everyone will have a choice in the matter, of course. Job loss, health problems, or family responsibilities can disrupt the best-laid retirement plans, forcing people out of the workforce sooner than expected.

But if you’re lucky enough to have control over when you retire, it’s worth thinking through the pros and cons before you make any decisions. Even if you can afford to retire early, you might not want to.

It isn’t too surprising that when we start thinking about retirement and planning for it is middle age.  When we have our lifestyles pretty well-defined, perhaps the career is where you want it to be, and the kids are here and growing up that you start looking down the road to the future.  Perhaps it is looking toward the future in terms of insurance, planning for college, and other issues such as this also get your mind moving on how you will be ready when retirement gets here. But if you’re lucky enough to have control over when you retire, it’s worth thinking through the pros and cons before you make any decisions. Even if you can afford to retire early, you might not want to.

If we were able to step back above our lives, the best time to start preparing for retirement is not the middle-age years.

Retirement planning experts tell us that if young people in their twenties or even teens can start putting a little bit back toward retirement, the rewards when they reach their golden years will be phenomenal.

If a youth in his early twenties or teens were just to put one percent of what they make back, and that money stayed in some form of investment vehicle that would grow into a retirement account, the growth between the time of investment and retirement at 60 or 65 can be explosive even at a modest interest rate.

Unfortunately, few young people are looking that far ahead when they are in their early adult lives.  That is a time when the transition from teen years to family life is pretty all-consuming.  So, parents and older advisors might be responsible for helping youth see the value of starting to work on their retirement savings well in advance, so they have a well-developed program when their retirement years come along.

One of the best places for a young person to start their retirement program is with the 401k or retirement benefits at their job.  In the last decade, many businesses have eliminated retirement benefits, where the company pays for retirement.  But if the young person works for a company that offers 401K, they can set aside a percentage of their income, and it will be put into a retirement fund before taxes.  Moreover, the company will often match the funds up to dollar for dollar, and the company will manage the investment of the funds.

The outcome is a healthy and rapidly growing fund that starts with an immediate doubling of the invested funds and rises steadily over the years as more is put into the fund with each paycheck.  The young worker gets used to the retirement money coming out, so they adjust their budget to live without it.  And without giving retirement much more thought than that, within a few decades, the 401K can evolve into an awe-inspiring retirement account to be sure.

If you are a young person and consider if you might think about starting a retirement account, congratulations, you are just a few people who have the foresight to think about retirement this early in life.  And by starting now, you take advantage of the thing that is your greatest asset – time.  If you only put a little bit back, that can grow and grow and become a sizeable retirement nest egg for you and your spouse even if you are the spouse off in your future.