What Is the Right Age to Start Saving for Retirement?

We all know the value and the importance of saving for retirement.  Contributing to your Individual Retirement Account, or IRA, is one of the tools that will help you make progress towards hitting your retirement goals.

We have a number of posts on IRA accounts (check them out here) – everything from choosing a traditional vs. Roth to how to get the best tax breaks from funding an IRA account.

Once you have opened an IRA, the next step is to contribute to it.  As we have mentioned before, regardless of what type of IRA you have, if you have earned income from the tax year, you can contribute up to the current annual IRA limitation ($5500 this year if you are under age 50).

You can contribute to your IRA by:

1. Mailing a check to your brokerage house

2. Making an annual contribution online

3. Automating your IRA contributions as a monthly contribution disbursed from your bank account.  This is our favorite option!


The more you can contribute to your IRA, the more you can grow your tax free or tax-deferred, and the more of a dent you will make in reaching your retirement goals.

The earlier you start, the more opportunity there is for the money to grow.

To illustrate this, we will show the value that someone would receive based on making maximum annual contributions to their IRA (as steady contributions) from different ages onward[1].

IRA Contributions


The earlier you begin, the more chance you’ll hit your retirement goals.  There is a BIG difference in beginning at age 25 and age  40: a $1.2 Million difference.  Even starting to contribute at age 35, the difference is quite substantial.

Even if you can’t contribute the maximum, the notion of just setting aside money at regular intervals on a regular basis has tremendous impact.  Start early: the difference is profound.

We will note that for those beginning to fund their retirement early, it is important to balance retirement goals with other financial planning factors that will affect your cash flow, such as the importance of saving for a house, paying off student debt, purchasing the proper insurance to protect future income.  Have financial planning questions?  Call us.





[1] Assumptions: at age 50 the contribution increases to the annual limit of $6500,  annual rate of return of 7%, no taxes apply until money is taken out



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