Updated: August, 2025

With daily expenses to worry about, saving as much as you can for retirement might not always be top of mind. Having a financial strategy for your future self, though, can save you a lot of stress in the long run. Here are some helpful reasons why starting your retirement planning early can pay off:

1. The earlier you start saving, the better.

Even if you feel like you don’t have a dollar to spare, increasing your contributions to your retirement plan can dramatically help your savings over time. If your company offers an employer match in an employee 401(k) or an employee 403(b) retirement plan, take advantage of it. Raises or bonuses can also mean more money to add to your retirement savings.

2. Your money can grow over time.

The earlier you start saving, the less you’ll need to contribute over time. Consider the following example. A 25-year-old with no retirement savings who earns $35,000 and contributes 6% into an employee retirement plan at work could have $335,469 by age 65, assuming a 6% annual rate of return. And that doesn’t include raises, increased contributions or possible employer matching contributions. If that same person waits until age 35 to begin saving, the same contributions will only grow to $171,370.* That essentially means that your retirement plan savings may be half of what they could be if you started saving at age 35 as opposed to age 25!

3. You can save for retirement while paying down debt.

Saving for future goals, including retirement, doesn’t need to be put on pause because of debt such as student loans or a mortgage. You can manage both at the same time because saving even in small increments is beneficial. Tax-deferred compounding means the investment earnings in your retirement account can be reinvested to create even more potential earnings. And the more time your money has to grow, the greater the impact tax-deferred compounding may have on your financial future.

The Power to Save Is in Your Hands.

Ultimately, the decision to save early for your retirement is entirely up to you. Remember, everyone’s retirement journey is different. Regardless, it’s important that you do your research and come to a conclusion that best fits your needs and makes the most financial sense.