The sooner you start saving for retirement, the better. Every year of missed savings is equivalent to many...Many..years of lost compound interest.

In fact, assuming you are 28 years old and begin to contribute $3000 to a Roth IRA each year until age 65, you would have accumulated a nice nest egg of $844,889. This example assumes a 9% rate of return.

What if you decided to delay saving for retirement by just one year? Amazingly, from age 29 to 65 and contributing the same $3000 you would have amassed only $772,128. That's a loss of $72,761 all because you decided to wait one year. Think about it, for a measly $3000 savings at age 28, you sacrificed a gain of $72,761. Again, all this under the assumption of a 9% rate of return.

Let's look at some more numbers. The max contribution to any IRA in a given year is $4000, unless you are age 50 or older, then it's $5000.

*Assuming you start contributing $4000 at age 28 through 65= $1,126,519

What if you had waited until age 29? You would have nearly $100,000 less for retirement. That comes to one year being equivalent to $100K.

This illustrates "The Sooner, The Better" philosophy of saving for Retirement.

The nice thing about a Roth IRA is that you can contribute every year until the day you die. Hmmm...let's take a look at that. Assume you contribute $4000 per year starting at age 28 through age 77 = $2,983,463

Not too shabby, eh.

But hey, you can't take it with you. So let's just keep it real. The fact of the matter is this:

$ you can contribute a maximum of $4000 each year

$ the max contribution increases to $5000 at age 50 and older (catch up contribution)

If you start contributing the maximum amounts each year starting at age 30 through age 65, you will have accumulated $1,187,213. Again, if you would have started at age 28 you would have saved $1,415,898.

Keep in mind, we are assuming a 9% rate of return. Your actual total will vary according to the type of investments utilized within your Roth IRA.

The best part of all this is the tax savings you have realized. The Roth IRA is most notable for tax free investment earnings and tax free retirement distributions. The tax free advantages are due to after-tax contributions. No, Roth IRA contributions may not be tax deductible. But, the earnings and income are tax free which more than makes up for the lack of a tax deduction.

Roth IRA Rules

The Roth IRA does come with some rules that must be met in order to take advantage

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