When it comes to saving for retirement it’s important to start putting money in the right places early. Retirement might seem like it’s a lifetime away, which makes it difficult to prioritize long-term saving, particularly if you have other goals that feel much closer. But missteps while you're young could mean losing out on major opportunities to grow your money and build wealth.

No matter how old you are, if you're not saving yet you're missing out.

Paying off loans, buying a house, saving for a dream vacation, these are just a few of the immediate costs that might seem more important today. And yes, you may want to prioritize tackling them first, but that doesn't mean you should put off starting a nest egg entirely. When it comes to retirement investing, every day that passes is lost earning potential.

Talk to any financial planner or personal finance expert and you'll get this advice.

The best time to start planning for retirement is the day you get your first paycheck. The sooner you put money away the more time it has to grow. By investing early on, your money will be working for you over the next couple of decades. When retirement finally arrives you won’t need to play catch up.

Now when we talk about putting money “away” we aren’t referring to a savings account with your local bank. Yes, technically a savings account earns interest, but it will not grow as efficiently as other accounts specifically intended for retirement. You want your money to grow aggressively over your lifetime. Taking advantage of tax benefits or accounts with higher earning potential is key. It’s also a lot easier to make that happen over the span of 40 to 50 years than it is over 15 to 25 years.

While there are many things out of our control, finances don't have to be one of them. Where you ultimately put your money is up to you, but it’s always a good idea to listen, learn, and leverage the various plans and outlets available to help set you up for financial freedom down the road.

So why is early planning essential to your future?

Here are some reasons you may not have thought of:

  • Average life expectancy is on the rise - Today, people are living longer than they used to, with the average life expectancy at 80 years old. For some people that number is even higher. With living a longer life comes the need for more money to get by, and let’s face it, there aren’t too many people who envision themselves still pounding the pavement during their “golden years.” So you want to set yourself up to have a retirement fund that will last your lifetime, however long that may be.
  • Tackle your bucket list - One of the biggest joys of retirement is having the time to tackle all of the things you most likely had to put off because of your job. Whether it was dreaming of particular experiences, or places you had always hoped to visit, a strong financial position in retirement allows you to do the things you’ve always envisioned.
  • Get accustomed to saving – By starting your retirement savings from day one, you’ll get used to putting money aside from the get-go. It's hard to build new habits, and starting to save later on in life will feel as if you’re “giving up” a portion of your salary. Once we start working and getting a paycheck, we get used to seeing a certain amount of money each pay day. The easiest way to build the habit is to have money taken out for savings from day one of a job, that way it will never feel like getting a cut in pay.
  • Thinking Long Term – Early planning forces you to think long-term. Where do you want to be financially 20, 30, 40 years down the road? What life goals, outside of work do you hope to accomplish? These may seem like tough questions to answer when you’re young and just getting started but addressing them early on will serve you best later on in life. Starting early also helps build good habits not to mention  compounding interest on the money you invest.
  • Deal with financial obstacles - Life can throw unexpected curve balls. No matter how secure you feel, having a plan B or a safety net to fall back on is necessary. Your retirement savings, if started early, can be that safety net. Dipping into your retirement fund isn't ideal, but it may put you in the best position to have options when dealing with unforeseen circumstances.
  • You Can’t Work Forever - Even if you're one of the lucky people who wouldn't mind working forever, it may not be possible. Naturally, age slows us down, and certain tasks become more difficult than they once were. Putting money away early on not only prepares you for retirement, it’s also there in case that day comes a lot sooner than expected. Regardless of when it happens, if you’re not prepared financially, you’ll have no choice but to continue working even long after you had hoped to.

Retirement takes careful planning.

A great place to start is by taking advantage of your employee benefits. Programs such as a 401k, IRA, or an HSA (Health Savings Account) are great places to start.

A 401k is an investment account based on the state of the stock market and will continue compounding throughout your career. One of the many advantages to this type of investment account is some employers will match your contributions up to a certain percentage. Think of it as a bonus from your boss. Plus, the money invested in a defined contribution plan is pretax, meaning it’s deducted from the gross amount prior to taxes being taken out, giving you a smaller taxable income.

In addition to a 401k, there are other types of tax advantage plans like IRA’s (Individual Retirement Account) and HSA’s (Health Savings Account) to help maximize the most return on your money.

Thinking about the best “home” for your money and mapping out your financial retirement plan can become overwhelming and frustrating. Your needs fluctuate so it's difficult to set it and forget it. But sticking to a consistent strategy is one of the best things that you can do for your money. If you don't have the time or desire, trusted experts like Playbook or a local financial planner can help build a plan and make sure your money is routed into the places where it earns the most. So while you’re working to earn a living now, your money is working to ensure your future.