We always hear about the importance of starting early to save for retirement. This yields several questions:
- Why start early? Why can’t you just focus on your bills now and “catch up” later when you are earning more money?
- What does “save” mean? Does this mean putting money in a savings account?
- What is “retirement”? Is retirement something you do at Age 65? If I love working, does that mean I don’t need to save?
The truth is that both “saving” and “retirement” are misnomers. The key is to invest for financial independence. This means having enough assets to cover your living expenses without having to work again. This might include having enough money to support your significant other and family, too. Whether you “retire” in the traditional sense or not is your choice.
Why start early? There are two big reasons: