How would you persuade a person in their 20's to invest in pension or retirement?

Question

How would you persuade a person in their 20's to invest in pension or retirement?

Answer 1

Explain to them the magic of compound interest and a Roth IRA. Start at age 21, invest $4K yearly into a Roth in a conservative mutual fund averaging 8% return and at age 61 they have $1.2 million to enjoy TAX FREE. The hard part is getting someone in their twenties to realize they will someday be 61. It will happen though and happen fast!

Answer 2

duh, how do u think we could plan retirement if one's career has not been stabilised?

Answer 3

Explain to them that they take home less than the person who invests. See example below:

Billy Bob makes $30,000 a year, but saves no money. His taxable income would be $30,000. Let’s say his tax rate is 25%. He would pay about $7,500 in taxes, and his take home pay for the year would be $22,500.

Freddy, Billy Bob’s brother, makes the same amount of $30,000 per year. However, Freddy participates in his companies’ 401k plan, and he contributes 5% of his wages to be invested. So, Freddy’s taxable income would be $30,000 less 5% or $1,500. Freddy’s taxable income would be $28,500. Taxed at the same 25%, Freddy would pay $7,125 in taxes. Freddy’s take home pay would be $22,875.

Freddy would actually bring home $375 more money than Billy Bob and would have $1,500 plus whatever amount his company matched in savings set aside! Billy Bob thought he was doing well, but actually he was hurting himself!

So, to answer the why, it should be very apparent in the example above - It truly pays to invest, especially when your company matches what you put in for FREE!

Answer 4

show them some people in their 60s and 70s..that still have to work everyday just to survive....retirement means nothing to a young person...but if u wait till your 40 or 50 its too late...and with the economic climate 1,000,000 dollars wont be enough in 30 years to retire on

Answer 5

It's not easy because younger people don't like to think about getting older. The best way to do it is to ask them what sort of lifestyle they would like to have when they stop working.