When it comes to saving for retirement, the sooner the better. Beginning your investment journey as early as possible can help accelerate your retirement timeline so you can retire comfortably—or even ahead of schedule.
Why Start Investing Early?
Develop solid investing habits: Starting early encourages consistent investing, so saving becomes a regular and sustainable part of your financial plan.
Build long-term security: With more time for your investments to grow, you can build a more substantial nest egg, which may provide more financial security when you retire.
Enable higher growth potential: More time in the market allows for a more growth-focused strategy with the potential for higher long-term returns.
More flexibility: The sooner you start, the more freedom you have to adjust your savings rate and investment approach as your goals and life circumstances evolve.
Reduce the impact of market volatility: Regularly investing a fixed amount regardless of market conditions—also known as dollar cost averaging—can help you purchase more market shares when prices are lower.
Room for error: A longer time frame gives you more time to recover from market downturns or make adjustments without compromising your long-term goals.
How Much Should You Save?
It all depends. To help determine how much you’ll need, think about your current income and the type of lifestyle you picture in retirement.
If you’re looking to potentially maintain your current lifestyle in retirement, financial experts recommend aiming to save around 15% of your pre-tax salary in addition to any employer match from age 25 to 671. This guideline is a practical benchmark that can help support your current lifestyle and prepare for your financial future.
What About Compound Interest?
While starting early gives your savings the advantage of time, compound interest can provide significant benefits. With compound interest, you can earn interest on the money you’ve saved and on the interest it generates.
Compound interest has the most impact over the long term. The sooner you start investing, the more opportunity your money has to grow.
What If I’m Starting Late?
If you’re getting a late start on your retirement savings plan, there’s no need to panic. Many people don’t begin saving until after their careers and life priorities are more established. What’s most important isn’t when you started—it’s moving forward with intention.
Starting later calls for a strategic approach, which may include:
- Increasing contributions as your income grows
- Making the most of employer matching contributions
- Adjusting spending to better support your long-term goals
Once you reach 50 years of age, the IRS allows for catch-up contributions, which let you contribute more than the standard annual limits in certain retirement accounts. This added flexibility can help you build momentum later in your career and reinforce your retirement savings as you near your goals.
Start Where You Are
With informed guidance and deliberate choices, you can move toward retirement with more confidence—regardless of when you began investing.
Whether you’ve started planning early or you’re just starting started, working with an experienced financial advisor can help you build a clear, intentional strategy to help fund your retirement.
Commentary provided in collaboration with Symmetry Partners, LLC. Symmetry Partners and Axis Wealth Partners are unaffiliated entities. Symmetry Partners is an investment advisory firm registered with the Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Investing in securities involves risks, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful. Content is provided for informational purposes only and is not advice. Neither Symmetry partners nor Axis Wealth Partners provides tax or legal advice. Discuss all strategies mentioned with a qualified professional prior to implementation.
- Napoletano, E., “How Much Should You Save for Retirement?” Forbes, March 18, 2024 https://www.forbes.com/advisor/retirement/how-much-to-save-for-retirement ↩︎