10 Reasons Why You Should Start Investing Early in a 401(k) Plan

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Less than 50% of the people in their 20s invest in a 401(k) plan at their workplace. But the power of compounding works in favor of the early saver. A person contributing only $5,000 each year (less than $500 per month) starting at age 25 will have a bigger nest egg than a person contributing $10,000 each year, starting at age 35 (assuming 8% rate of return). Here are some other reasons why I started saving for my retirement in my early 20s.