The Power Of Compounding

We hope you have learned about the power of compounding by now. If not, consider your future retirement. How much of your salary do you need to save in order to replace your pre-retirement income? Somewhere between 4 and 44 percent of your salary! If you start saving at 25 and retire at 70, you only need to save 4 percent of your salary, but if you wait to start saving until you are 45 and want to retire at 62, you will have to save 44 percent of your salary. That is quit a big difference and shows the power of compounding.