When Should You Start Saving for Retirement?

A business economics graduate of the University of California, Santa Barbara, Darrach Bourke is a managing director with Emerson Equity. At the California-based financial consulting firm, Darrach Bourke offers retirement planning guidance to clients.

According to a study by Charles Schwab, a provider of financial services, one-third of Americans believe they’ll need between $1 million and $3 million in savings to live well in retirement. Financial advisors recommend people start saving for retirement in their 20s when they graduate from college and land their first steady job because it can take them decades of hard work to save this much money. They also advise this because the earlier someone starts thinking about and saving for retirement, the longer their regular savings — ideally at least 10 percent of their monthly income — have to grow as a result of compound interest and investment returns.

Unfortunately, more than 60 percent of working Americans wait until they’re well into their 30s or older to start saving for retirement. As a result, many find themselves without enough time to accumulate a retirement fund that can support their dream retirement or maintain the same standard of living they have enjoyed while working. This leads to almost 20 percent of Americans stating that postponing retirement saving is one of their biggest financial regrets.