Here is a scenario of two young agents with National Agents Alliance planning to save for the future. Both agents are 24 years old and, since they are in the financial services industry, they decide to start thinking long-term about their future just like they recommend to their clients.
One of the strategies they discuss is putting some extra money away in an IRA on top of their other investments.
One of the young agents procrastinated, like so many of our clientele do, while the other began a savings plan right away.
The “smart” agent put $2,000 in an IRA starting at age 24 and again each year through age 30. He invested a total of $14,000 but at age 30 decided to stop adding to the IRA. When he reached age 65 his IRA totaled $1,074,968. Because he started early, and his money had “time” on its side, it compounded year after year to over a million dollars.
On the other hand, our procrastinator found excuses for not saving, excuses similar to those our clients come up with.
Finally, at age 30, the second agent decided to go ahead with the savings plan and put $2,000 in the IRA every year, and while he managed to accumulate over a million dollars by age 65, he had to put in his $2,000 every year all the way through age 62. That’s thirty-three years compared to seven years!
Do you think it’s important to get your clients to start early in planning their financial future? It’s made even more clear when you see the numbers! Agents must “practice what they preach” and follow Andy Albright’s tenets from The 8 Steps to Success…number 1: Personal Use. Show clients you believe in planning for your financial future and you’ll have an easier time getting them to do the same.
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The cost of waiting? $54,000!!!