Attention College Students: Start Saving Now

By: Jason Collazo


Tamara Langham, a senior account executive with the Defined Contribution Customer Experience Group at Lincoln Financial Group’s Atlanta office, stated, “ Sometimes we run across an older employee who says that he should have started saving earlier. We tell participants that the best time to start saving is 10 or 20 years ago, but the second best time to start is now.”
College students have a lot on their plates. With exams, research papers, internships and social events, it is easy to understand why most college students disregard their retirement savings plans. While their academics and social activities are important, retirement savings need more serious attention.
According to the tax information service CCH, only 4% of young workers are maxing out their retirement plans. Unfortunately, that means 96% are potentially losing hundreds of thousands of dollars in opportunity costs.
By saving a mere $100 a month from college to retirement, consumers can yield an economic profit of $500,000 dollars. For only investing a total of $25,000 dollars, you might wonder how that is possible. That, college students, is the beauty of compound interest.
College-level students need to take advantage of compound interest. For example, take a bank account that has $1000 and earns interest at a rate of 5% interest per year. By the end of the first year that account balance would increase to $1050 and then to $1,102.50 by the end of the second year. Putting your money in banks that offer high compound interest rates is essential for those who want to make huge returns come retirement.
Be smart. Reports indicate that the average American worker starts saving for retirement at the age of 40. If these workers had started saving during college, they would have gained an additional $400,000 in savings. Not only should consumers start saving as early as possible, but they should also find the bank that will maximize their savings.
When looking for the best banks, students should keep an eye out for the bank’s annual percentage yield. Try to find a bank with a good balance between a high APY and minimal fees, and you will be on the right track to securing your future.


Jason Collazo is a Columbia University student whose interests include economics, personal finance, and marketing.This combination of studies helps the writer shine a unique perspective on the U.S. economy, consumer trends, and business competitiveness. Jason is also a member of Columbia’s NCAA Varsity Diving Team.

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