When I was growing up, it seemed as if my parents had this hidden and ever-expanding list of things I was too young to do.  On the list: ride my bike to school, have and/or shoot a BB gun, drive the car (peculiar, as I was 18 at the time), drink coffee, and put more than three mothballs in my mouth at any one time. There were others on this list that were SO prohibited they were never, ever discussed. Yet, I survived. But today, sadly, it seems like culture offers no “prohibited list” whatsoever.  It calls to our kids like Sirens to sailors to “start now, or you could miss out!”

As a father of four boys, I have a list as well.

But I’ll join culture’s call on one topic – saving for retirement. “Why start now?” you ask. Because one day you will retire. Because the government didn’t/shouldn’t take you to raise. Because living expenses don’t cease when the pay periods do. Most importantly – it’s your retirement, it’s your responsibility, and you’ll want to be ready for it. Enter:  The Rule of 72.

The Rule of 72:  A rule stating that in order to find the number of years required to double your money at a given interest rate, you divide the rate of return into 72. The result is the approximate number of years that it will take for your investment to double. So, let’s say you’re 30 years old and have $25,000 in your 401(k). Let’s also assume you receive an 8% annual return on your investment. Given the formula above, your money should double every 9 years. See the illustration below:

Age                        Balance

30                           $25,000
39                           $50,000
48                           $100,000
57                           $200,000
66                           $400,000

Granted, there are assumptions being made with respect to an 8% return year after year. But let’s look at it another way. Let’s say you opted for the Ford F150 with that $25,000.00, rather than having it invested in your 401(k) or IRA.  Are you even driving that truck 9 years later? If so, a quick value comparison with Kelly Blue Book and your retirement account will speak volumes. This is a $25,000 decision that could cost you $375,000. Listen closely and you’ll hear the sound of the Sirens beckoning…this time, however, it’s okay to listen.

Start saving.