The million dollar mistake that 20-somethings make wrote this great article about the number of 20-30 year old’s who are abandoning their 401K plans at work because of the turmoil in the markets.  This is unfortunate.  I don’t know when the stock market will turn around but I am willing to bet my life savings that by the time I am ready to retire (in 20+ years) the market will have returned and appreciated many fold.

Here’s why NOT participating in a retirement plan during your early years can become a million dollar mistake:

Let’s compare a person who starts at the age of 23 versus 33.  We’ll assume they’re each able to save $200 per month, will retire at 65, and will earn a 10% return on their investments.

By the time they each reach the age of 65 here are the results:

Started at 23: $1,561,776

Started at 33: $561,667

Those 10 years cost the latter individual over $1,000,000.  OUCH!

Lesson: Don’t be discouraged by market fluctuations, sign up for your companies 401K and forget about it!