FAQ: Too Late for Financial Planning?« Back to Questions List

Is it ever too late to start planning for retirement? It’s only too late to start planning to achieve the level of success that you would like.  Given that time is your most effective component of the time value of money, leaving yourself any less time than starting right now can limit your success. A better way to phrase that idea might be, ”Is it ever too early to start planning for retirement?”  The answer to that is a definitive ”no”. When you are working to grow your wealth with compound interest, time is your most effective component.  Given a fixed interest rate and amount of capital, more time to allow earning interest on interest will help you earn a higher overall return on your money. Planning for retirement is building your wealth so that you have both it and its annual earnings as cash flow to work with later in life.  Locking your wealth into government-sponsored tax-deferred programs that limit your liquidity and investment options has serious issues, from my perspective.  Qualified government programs are not the only answer for retirement, however, especially when safer, more liquid, less restrictive, and less expensive options exist.