From Joshua Kennon,
Your Guide to Investing for Beginners.
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1. Time is money– start today
The most important key to retiring rich is to start saving as early as possible. Many workers, strapped for cash or eying a major purchase, tell themselves they can make up for lost time by making higher contributions in future years. Unfortunately, money doesn’t work that way. Thanks to the power of compound interest, cash invested today has a disproportional impact on your wealth level at retirement.

To put the matter into perspective, consider two possible scenarios; both assume a retirement age of 65 and an annual compounded rate of return of 10%.

John is 40 years old and invests $20,000 a year for retirement. Charlotte is 21 years old and invests $5,000 a year for retirement. By the time each of these individuals retire, they will have invested $400,000 and $220,000 respectively. Yet, because of the power of compound interest, John would retire with half the money as Charlotte despite investing twice as much! (John would retire with $1.97 million, Charlotte with $3.26 million).

The moral of the story? Stop robbing your future to pay for today.

2. Max out the annual contribution limit on your IRA
When it comes to IRA contribution limits, Uncle Sam’s motto seems to be “use it or lose it”. Workers that haven’t made the maximum permissible contribution to their Traditional or Roth IRA by the cut-off date are flat out of luck unless they are in their mid-fifties and qualify for catch-up contributions.

3. Take full advantage of employer matching funds
Many companies will match up to fifty-percent of the contributions employees make to their 401k and other retirement accounts. If you are fortunate enough to work for such a business (and millions of Americans are), take advantage to the fullest! If you don’t, you are literally walking away from free money.

4. Don’t cash out of your retirement when you change jobs.
If you are anything like the average American worker, the odds are fairly substantial you are going to change jobs at some point during your career. When this occurs, the most foolish thing you could possibly do is to cash out of your retirement plan. Instead, roll over the proceeds into an IRA or your new employer’s 401k plan. In addition to avoiding the significant tax penalties, you will be able to keep your money working for you tax-free. Given enough time (you already saw the power a few decades can have on seemingly small amounts of money), this literally could mean the difference between vacationing in Tahiti and having to take a job at the Golden Arches to supplement your income

5. Avoid IRA withdrawal fees
There are numerous ways to withdrawal money from your retirement account in the event of an emergency. Before you even think about doing so, make absolutely certain that you have done everything required to qualify - otherwise, you will get a very unpleasant and expensive wake up call when you are hit with possibly thousands of dollars in fees and penalties.

6. Expand the Pie
Don't just cut expenses - find a way to make more money! By taking on side work or turning a hobby into a business enterprise, you can create additional streams of income to help fund your retirement. In many cases, this is an excellent alternative to cutting costs because it allows you to maintain your current standard of living while providing for your future.