Many Americans believe the best time to begin saving for retirement is in their late 20s. A recent Empower survey of over 1,000 adults found that the average “ideal” age to start saving is 27, with a target retirement age of 58. Yet financial experts emphasize that starting even earlier can make all the difference, especially for those aiming for early retirement. The advantage lies in compounding, which rewards time above all else.
When Americans Actually Start Saving
Survey results show a gap between retirement ideals and reality. While today’s younger generations are beginning early—Gen Z around 20 and millennials around 25—older generations often delayed saving. Gen Xers and baby boomers started closer to ages 30 and 35, according to the Transamerica Institute. This later start often contributes to financial stress later in life. In fact, 40% of Americans told CNBC they feel behind on savings, most citing debt, low income, or a delayed start.
The Regret of Starting Too Late
Not beginning early enough is one of the most common financial regrets. Empower’s study found that nearly half of Americans wish they had started saving sooner. Charles Schwab reported a similar trend among women, who typically began investing at age 31, with 85% saying they wish they had started earlier. Experts agree that the earlier you begin, the more flexibility and financial security you can build for later years.
The Power of Compounding
Compounding is the key reason advisors stress starting young. Compound growth builds wealth not just on contributions but also on accumulated earnings. Fidelity notes that “time fuels the potential power of compounding.” For example, saving $100 per month from age 22 with a 6% annual return could result in more than $242,000 by age 65. Waiting until age 27 to begin reduces that total to around $174,000—a gap of nearly $70,000 from just five years of delay.
Making Early Retirement Doable
Advisors say that saving in your 20s gives your investments three to four decades to grow, making early retirement possible. “Three decades is a good amount of time for your money to grow and compound,” said Gloria Garcia Cisneros of LourdMurray. However, those starting later must save more aggressively and commit to disciplined investing strategies. The lesson is clear: the earlier you begin, the more freedom you’ll have when deciding whether to work into your 60s or retire earlier.
Conclusion
While many believe age 27 is the right time to begin saving, experts stress that starting earlier provides a critical advantage. Compounding magnifies the value of time, turning modest contributions into significant nest eggs. For those who wait, catching up requires higher savings rates and stricter discipline. Retirement security is less about a fixed age or dollar figure and more about when and how consistently you begin investing for your future.
