Small Savings Can Still Save Our Retirement

Jun 09, 2010: With increasing price of food and gas, it has become a challenge to save a substantial amount of our salaries to fund our retirement. The subprime mortgage fiasco has reduced the market value of our homes. Consequently, unless we have stellar credit records, it is becoming increasingly difficult to get credit these days. Also, with the rise in unemployment, our jobs are also becoming less secure as time passes. For us, Americans, this is one of the most financially challenging times in recent history.

Since the economy is in turmoil, it's more important for us to contribute some money towards our retirement every month. Even a tiny monthly contribution, can grow into a tidy retirement savings via the power of compounding. Here is an example.

According to MSN Money's Savings Calculator, if you saved just $10 a week, or $40 a month, you'd end up with almost $60,000 in 30 years, assuming an 8% return. (Historically, that's been the long-term return for investing in stocks.)
If that's too taxing, let's say you were to save only $10 a month. In 30 years you would have more than $14,000.

Though the amounts appear small, we feel that something is better than nothing. And perhaps with our social security checks (if it exists till then) and our homes paid off, we can survive on these savings for a few retired years. Little drops of water do make the mighty ocean!

How $10 could save your retirement

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