The time to start thinking about retirement is always today, right now, this second. The earlier you start saving and investing, the more time your savings will have to grow into what you’ll need to live on in retirement, but that’s not the only reason it’s better to start saving earlier.
During your lifetime there will always be a reason to put off saving for retirement. Whether it’s to pay off student loans, that you’re not making as much money as you think you will later on, that you’re buying a house, remodeling the kitchen, having kids, buying a car… and the list of constants, the possibilities go on. Life, and its expenses, are not going to stop at some point and put up a sign that says OK, now is the time to save for retirement!
Most Americans aren’t saving enough for retirement, it’s a fact. The earlier you start setting some aside, the easier it will be to make a habit of it. Certainly, there may be times when you won’t really save much, but every little bit counts. And those little bits that you save, if you put them in a 401k or IRA, will be invested and will earn you returns over the years. The money you save when you’re 50 will have much less time to invest and earn returns than the money you invest when you’re 25.
More than just the money part, you’ll want to start figuring out what you want to do in retirement. Do you want to travel the world, play golf, take classes, learn to sew? A good thing to ask yourself is what don’t you have time to do right now? These are things you can follow during retirement. It’s important to think about these things ahead of time, not only so you have some direction when the time comes, but so you can afford any additional expenses you want to save for. What you do when you retire will have an effect on how much you’ll need for your annual income and how much you’ll need to save now overall.