Contributed by Maggie Andrews, Volunteer Blogger
Perhaps you have found it, your dream job. You know what you want to do professionally, and you have offers but are unsure of what to look for in an employer. Though there are many criteria to consider when choosing an employer, one that should come to mind is how you are going to save for retirement. Retirement, in my early twenties, really? Yes really. The earlier you start investing in yourself, the more money you can have saved come time for retirement. Regardless of industry, rank, or education level retirement can be a valuable element to securing your future. Let’s break this down.
What is Compound Interest and why should this be important to you? Compound interest is interest earned on interest. (U.S. Securities & Exchange Commission, 2022). Interest is calculated throughout the year on the total amount in your investment account, not just the invested amount. What does this mean for you? This means that if you start investing early in a retirement account such as a 401K, you could grow wealth beyond what would be capable with a simple savings account. How does this decision impact my choice of employment? Let’s look further.
According to the U.S. Bureau of Labor Statistics, in 2020 sixty-seven percent of private industry workers had access to retirement plans, which includes both goods-producing industries and service-based industries. (U.S. Bureau of Labor Statistics, 2022). Wow! Plans such as a 401k can offer matching contribution benefits for employees that can allow them to grow their retirement faster. This is a big benefit and should be considered fully when you interview and accept a position. It’s not always just about the paycheck, it's also about the benefits that the company is able to provide!
Not every company will have a retirement option. If you work for a company that does not have an option, consult a trusted bank or financial institution for investment options. However, should you receive offers for employment, be sure to consider which future employer may help you earn more money in the long term. Your future self just may thank you for it.
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