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When Should You Start Saving For Retirement?

When Should You Start Saving for Retirement?

The two most important requirements for major success are: first, being in the right place at the right time, and second, doing something about it. — Ray Kroc, founder of McDonald’s

Mr. Kroc was right. If you want financial security in your future, you need to start saving for retirement at the right time — which is as soon as possible. The more you save, the bigger your withdrawals will be.

Image source: Getty Images.

Many people are not saving aggressively for their retirement, assuming incorrectly that it’s too early or too late to do so. Let’s take a look at both of those arguments and then review just what you can achieve. (Want to retire early? It might be more within your grasp than you think.)

It’s not too late to be saving for retirement

It’s easy to assume that there’s little point in saving for retirement if it’s only a few years away and you haven’t got much socked away and you’re counting on Social Security. Go ahead and count on some Social Security income in your retirement, but it may be less than you expect, and it probably won’t be enough to support you.

Clock on whose face it printed
Image source: Getty Images.

The average monthly Social Security retirement benefit was recently $1,364, which amounts to $16,368 per year. If your earnings have been above average, you’ll collect more than that — up to the maximum monthly Social Security benefit of $2,687 for those retiring at their full retirement age. (That’s about $32,000 for the whole year.) See? It’s not exactly a king’s ransom. You can get a sense of how much to expect from Social Security via the Social Security Administration’s online Retirement Estimator tool, and you can get an even clearer idea of your expected benefits by setting up a my Social Security account with the SSA.

Or maybe you’re counting working as long as you can or holding a part-time job in retirement to supplement your Social Security with additional retirement income? That’s a reasonable plan — except that life’s curveballs may get in the way. According to the 2017 Retirement Confidence Survey, 48% of retirees left the workplace sooner than they had planned to — with 41% of them doing so because of health problems or disability, 26% citing company downsizings or closures, and 14% having to care for a spouse or other family member.

A better plan is to save aggressively beginning right now. Here’s how much you might amass over several relatively brief time periods if your money grows by an annual average of 8%:

Growing at 8% for

$10,000 invested annually

$15,000 invested annually

$20,000 invested annually

3 years




5 years




10 years




12 years




15 years




See? Even if you’re only five years from…

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