Carrie Schwab-Pomerantz
Chief Strategist, Consumer Education, Schwab & Co.

What's the benefit of starting to save for retirement as soon as you can?

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"Young people have more time to weather the ups and downs of the stock market."

Carrie Schwab-Pomerantz

As chief strategist/consumer education for Charles Schwab & Co. Inc., Schwab-Pomerantz is a leading advocate for individual investors. She speaks and writes extensively about personal finance issues and is a driving force in the movement to improve financial literacy in America. As president of the Charles Schwab Foundation, she also oversees the company's philanthropic strategy and resources.

With her father, company founder, chairman and CEO Charles R. Schwab, Schwab-Pomerantz co-authored "It Pays to Talk: How to Have the Essential Conversations With Your Family About Money and Investing," which Publishers Weekly called "a well-rounded primer that provides one-stop shopping for the many phases of financial understanding and planning."

Schwab-Pomerantz is a sought-after speaker whose public appearances have included appearances on "The Today Show," CNBC and NPR. In 2001, Working Woman magazine recognized her as one of four “Market Movers” in America who are “rewriting the rules of finance,” and she was also recognized as one of the “25 power Elite” in the financial services industry by Investment News. For four consecutive years, The San Francisco Business Times has named her one of the San Francisco Bay Area’s 100 Most Influential Women in Business.

A graduate of the University of California, Berkeley, with a bachelor’s degree in Political Science, Schwab-Pomerantz later earned a master’s degree in business administration from George Washington University. She holds NASD Series 7, 63 and 8 registrations. 


Question: What's the benefit of starting to save for retirement as soon as you can?


Carrie Schwab: Let me give you an example. And I don’t really have the numbers memorized, but you can get gist.

There is a pretty common example that you have twin sisters and they are both 25 years old.

One sister at 25 saves $2,000 a year for 10 years until she is 35 okay, and then she stops at 35. And she just let’s that $20,000 grow until she is 65.

While her twin sister did not save that whole 10 years, she starts when she is 35 years old, at the time when her other sister quit saving, and she saves $2,000 a year for the next 30 years until she is 65 years old, which she saves a total of $60,000.

You know who ends up with more money? Sister one, who only saved $20,000 compared to her sister who saved for 30 years a total of $60,000.

Sister one, who again only saved 10 years, almost has double the amount of money of the second sister who saved more, but waited longer, waited 10 years before she started saving, that is the power of compound growth.


Recorded on: March 27, 2008