Perhaps in 30–40 years the state will begin to pay good pensions. Perhaps children will take care of you. Perhaps communism will abruptly come in the country and no one will need anything. Anything is possible, but with such hopes you only take off your responsibility for your future and transfer it to someone else.
Instead, you can now take simple steps that will provide you with a normal retirement standard of living. And a difficult percentage will help in this.
What is compound interest
Imagine Andrei. Andrei is 30 years old. He saved up a million rubles and put it on a bank deposit at 7% per annum. A year later, on his contribution lies the initial million and 70,000 rubles of interest.
A year later, Andrei again receives his 7% per annum, only now they are calculated not on 1,000,000 rubles, but on 1,070,000 rubles. In the second year he earned already 74,900, and not 70,000 rubles.
Andrey launched the compound interest mechanism: the bank accrues interest on the money received from interest.
After 35 years, Andrei will turn 65 and he will retire. By this time, his contribution will be almost 10 million rubles. Each year, these 10 million will additionally give all the same 7% - this is 698,000 rubles a year or 58,000 rubles a month.