Resolution 2025: Prioritize Saving

Today we’ll ask you once more to take a step back from all the noise and consider how you feel about your finances. It’s a complex question, so we’ve broken it down, offering a framework for thinking about three main areas — spending, debt, and in this article, investing for your future. We hope it will inspire you to start 2025 with new resolve, or simply with fresh gratitude that you’re on the right track.

Let’s face it, saving for the future isn’t that easy. Maybe you don’t prioritize it over more immediate needs. Or it can’t be a priority, given your current job status, family situation, or extenuating circumstance.

Perhaps it seems futile, considering how much you’ll need in the end. Or you’ve simply put it off. Or, you want to start that 401(k), but you’re daunted by the prospect of losing money in an unpredictable stock market. Better still, you are saving, but it’s taking a lot of self-control.

No matter the circumstance, it can be challenging to build up the savings you’re going to need for retirement, your kids’ college education, or an unexpected emergency. So here’s some math to keep in mind and to motivate you.

First, the earlier you get started, the better. And not only because you’ll have more time to invest, but because the longer you’re in the market, the more compound returns can work in your favor.

Making regular contributions through your employer’s 401(k) plan or to an individual retirement account (IRA) demonstrates the power we’re talking about. As this chart shows, starting at age 20 rather than 35 could mean hundreds of thousands of additional dollars by age 65 — even if the 20-year-old contributes half as much each month.

Second, the U.S. stock market tends to appreciate over time. The S&P 500 Index — the broadest measure of the market — has delivered an average return of roughly 10% over the long term (or 6%-7% when adjusted for inflation).

Third, consider this stark divide: The number of 401(k)-created millionaires at Fidelity Investments jumped to a new record high of 544,000 in the third quarter — an increase of nearly 10%. And yet, one in five Americans 50 and over have no retirement savings, a 2024 AARP survey shows.

So what? Your bills, fears, and countless other priorities can interfere with your long-term financial goals. But the cliches are true: Even a little goes a long way when you use a high-yield savings account, 529 college savings plan, or retirement account. And the longer you’re invested, the more likely you are to earn a return. Like they say, the best day to start investing was yesterday; the second best day is today.

Related Reading

•   Maximizing Your 401(k) Is a Huge Reward for Your Future Self (SoFi)

•   Liz Looks at: The 2025 Outlook (SoFi)

•   Savings Fitness: A Guide to Your Money and Your Financial Future (U.S. Department of Labor)

photocredit: iStock/kate_sept2004

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