When Should I Start Saving for my Retirement?

When Should I Start Saving for my Retirement?

Everyone wants to know – when should I start saving for my retirement? What’s the ‘right age or the right time’?

The answer is simple. Right now. Actually, the answer is the minute you started working as an ‘adult.’ If that time has passed, then we’ll defer back to the ‘right now’ answer because every day that you let go by is an opportunity cost.

The Secret to Having Enough Money for Retirement

Everyone wants to know the big secret. How do you have enough money for retirement, whether that number is $1 million or higher? It seems like an unattainable goal or a pipe dream.

It’s not.

Here’s the secret – time. Small, consistent contributions over a long period allow you to have that million-dollar retirement fund you dream of having. The more time your money has to grow, the more money you’ll have in retirement, yet the less you had to contribute yourself.

What if you Didn’t Start Right Away?

If you didn’t’ start saving right away, don’t worry. There’s still time to catch up. The faster you figure out that you need to contribute to your retirement funds, the better, though.

You can’t make up for time and that’s what compound interest requires – time. The more time your money has to grow, the more money you’ll have at retirement. If you wait and save for retirement at age 35, for example, you’ll need to contribute a much larger amount each month to have the same amount of money at retirement than if you started when you first started working.

What Should you do Before you Save for Retirement?

Before you jump in and save for retirement, there are a few key financial areas you must look at before investing for retirement. 

  • Do you have an emergency fund? An emergency fund should have three to six months of expenses in it. Just look back at 2020 and you’ll see why an emergency fund is so important. No one has a completely secure job or can predict that they won’t fall ill and be unable to work. Life happens and we have to be prepared for it. If you don’t have an emergency fund, start with $1,000 and work your way up so that you have 3 to 6 months of expenses saved.


  • Do you have debt? Investing in your retirement can be fruitless if you’re carrying high-interest consumer debt. Balancing your money between debt payoff and investing in retirement is a good idea, but if you’re in over your head in debt, get out of it. Imagine how much more money you could invest in your retirement when you don’t have consumer debt.


  • Do you have a budget? It’s important to know where your money goes and how much you need to support your family each month. This tells you how much money you have to invest for retirement.

Is it too Late to Save for Retirement in your 30s, 40s or 50s?

Everyone talks about saving for retirement in your 20s. What happens if you didn’t jump on that bandwagon because you were laden with student loans and credit card debt, not to mention trying to buy a house or travel the world?

It’s never too late to start. Any money you can put away now to defer until retirement is helpful. If you start in your 30s, let’s say 35, you still have 30 years to put away for retirement. That’s 35 years of compound interest and growing assets. There’s a lot of value in that.

Once you get into your 40s, you still have 20+ years left before you retire. Many people even put off retiring until their mid-70s, which gives you even more time to let your money grow. If you’re in your 40s and haven’t’ started, the time is now. Even if you have debt or don’t have an emergency fund, create a budget that fits all of it in so that you’re not ignoring any important area of your finances at this stage in life.

How to Save for Retirement

Now that you know you should start saving right now, how do you start? 

You have a few options. First, look at your budget and know how much you can contribute. Using that amount, you can decide where you should invest your money. 

No matter where you invest, consider setting up automatic contributions. 

Here’s why.

Why put the stress on yourself to remember to contribute to your retirement? We are all guilty of paying ourselves last. We go about our lives, making sure our bills are paid and that we have enough money to cover our wants and needs, that we forget to pay ourselves, including saving for retirement.

What if you thought of saving for retirement as a ‘bill’? It’s a necessity after all. Without it, you and your loved ones would have to rely on Social Security income, which isn’t enough to sustain anyone. It’s meant to be supplemental, not a main source of income.

When you set up auto contributions, you’ve budgeted the funds and know you can contribute. Then there’s no question about what you can afford or if you can contribute each month.

Where should you save for retirement?

This is the big question. You know how much you have to save for retirement, but where do you put it? First, consider your retirement plans. Will you need the same amount of money you live on now, more, or less? If you have plans to travel the world, for example, you may need more. If you will live a modest lifestyle and even downsize your home, you may need less.

Try planning what your future looks like, at least for now, so you know how to structure your portfolio (very aggressive, somewhat aggressive, or more on the conservative side).

Focus on compound interest and/or how each investment will grow. Savings accounts, for example, have the lowest amount of interest because they’re extremely safe. When there’s little risk, there’s also little reward. While they are a great way to offset risky investments, it shouldn’t be your main focus.

Instead, look at investments such as offshore investing, the stock market, and the bond market. Real estate is a great way to diversify your investments too. Whether you invest in physical real estate, owning an investment property, or you invest in real estate investments, such as Real Estate Investment Trusts or Peer-to-Peer loans, you’re investing in real estate by providing the funds companies and individuals need to invest in real estate themselves. 

What if you Can’t Put Away for Retirement?

If you can’t put money away for retirement regularly, there are other ways to build up your retirement fund. While we always recommend putting away at least a small amount every month, here are other places to look for retirement funds:

  • Tax refunds – If you regularly receive tax refunds at tax time, invest them in your retirement rather than spending it. If you get a few thousand dollars back, that could make up for any amount you didn’t contribute that year.


  • Money from a raise – If you receive a raise and don’t need the money to live, consider investing the difference in your retirement. You could even set up your automatic contributions to automatically escalate when you receive a raise.


  • Windfalls – Any money you receive as an inheritance, work bonus, or other unexpected income can help fund your retirement. Large deposits are a great way to boost your fund and get you closer to your retirement goals. 

Don’t Give Up

The key factor is not giving up. It can be hard to think of retirement when it’s 20, 30, or even 40 years away. But the sooner you think about it, the more money you’ll have during your golden years.

Whether you want to set yourself up for financial success or you want to leave behind a legacy for your loved ones, there are plenty of reasons to think about saving for retirement NOW.

If you’re asking when the best time is to save for retirement, it’s as soon as possible. If you haven’t saved anything yet, let’s talk about how you can. Whether you need to revamp your budget, find another income stream, or rethink your investing strategies, there are always ways to save for retirement.

Every day that you let go by without investing for retirement is like throwing money out the window. Enjoy the value of compound interest and let your money work for you other than the other way around. You work hard for your money and now it’s time to let it work hard for you. 

Get in touch with us for a free consultation regarding your retirement planning and investment for retirement.


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