In Reply to: Confounded compounded interest posted by Oldtimer on November 12, 2004 at 13:47:23:
It is true that starting late in life really cuts into the effect of compound interest. You still do get interest on your interest, but it won't be as dramatic as it would be.
I've had an IRA account since I was about 23 years old. I haven't put anything in it for a while. I should, but other things come along. But, as you point out, I've got such a history in the account, it has a life of its own.
At the end of the day, saving at least something is always a good thing.
It's still a good idea to look for a unionized job. My employees who are members of the Decorators and Teamsters union don't pay anything out of pocket for their retirement. They are vested in only five years. A person who starts working at 55 can retire at 60 with full benefits (although very low, due to small number of years). A person who started working around age 20, can retire at age 50 with benefits in the range of $30,000 to $70,000 per year. You will be hard pressed to find this kind of deal anywhere other than a unionized job, however. Private companies just don't offer this to non-union employees anymore.
The other thing I should say, even though I may get killed by some people who firmly believe other wise is....
If you started late, you really need to think twice about paying for a college education for your kids. Consider having them take out loans, or do whatever they need to do to finance their own education. They have a lot of years to pay that off. You don't. Sometimes hard decisions like this have to be made.