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When to Start Saving for Retirement and How to Catch Up

April 22, 2024

Retirement may seem like a distant destination, but the journey begins today. In this section, we delve into the critical question of when to start saving for retirement and explore practical strategies for those getting a late start.

How Early Should You Start Saving for Retirement?

The simple answer? As early as possible. The power of compounding means that the sooner you save, the more time your money has to grow. Even small contributions in your 20s or 30s can add up significantly over time, thanks to the magic of compound interest.

Why It’s Important to Save for Retirement ASAP 

Retirement may seem like a distant dream, but it’s essential to start saving early to ensure a comfortable future. With longer life expectancies and uncertain economic conditions, you may need more than just social security or pensions to maintain your desired lifestyle in retirement. Starting early gives you the best chance to build a substantial nest egg to support you during your golden years. 

Common Reasons Someone Isn’t Saving for Retirement

Despite the importance of saving for retirement, many Americans find themselves unprepared. Reasons vary, from competing financial priorities such as paying off debt or covering everyday expenses to a lack of understanding about retirement planning. Additionally, some may delay saving due to the belief that they have plenty of time ahead, only to realize the urgency of retirement planning later in life. 

3 Ways to Start Saving Money for Retirement

  1. Employer-sponsored retirement Plans 
    • Take advantage of employer-sponsored plans like 401(k)s or 403(b)s, especially if your employer offers matching contributions. Contribute at least enough to maximize the match.
  2. Individual Retirement Accounts (IRAs)
    • Explore Traditional or Roth IRAs, which offer tax advantages and a wide range of investment options. Even if you don’t have access to an employer-sponsored plan, you can still save for retirement through an IRA
  3. Automate Your Savings
    • Set up automatic contributions to your retirement accounts to ensure consistency. Treat retirement savings as a non-negotiable expense, just like rent or utilities.

Started Saving Late? How to Utilize Catch-Up Contributions

If you find yourself behind on retirement savings, don’t worry. Individuals aged 50 and older can take advantage of catch-up contributions, allowing them to contribute additional funds to their retirement accounts above the standard limits. For example, in 2023, individuals can contribute an extra $6,500 to their 401(k) and an additional $1,000 to their IRA.


The journey to retirement is a marathon, not a sprint. Starting early and being proactive about saving can build a secure financial future. It’s never too late to catch up, even if you’ve fallen behind. Remember, every dollar saved today is an investment in the retirement you envision tomorrow. 

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