Creating a retirement savings plan can be complicated. You have to figure out where to invest -- in a 401(k) or IRA or other tax advantaged account -- and how much. You'll also need to make tough choices about what assets to invest in, and keep an eye on fees you pay

All of this can seem really overwhelming, and it can be hard to know where to get started. But while you may not be 100% clear on what you need to do to get on track to save for your future, keep one simple thing in mind: You need to start saving ASAP. 

Not saving as early as possible is the single biggest retirement mistake you can make. And, depending upon how long you delay and how much you save each month, even waiting just a decade could lead you to lose $200,000 or more. 

Binder labeled retirement savings plan with calculator sitting on top of it

Image source: Getty Images.

How big a mistake is it to wait?

A delayed start in making a retirement savings plan is way more costly than most people realize. In fact, waiting just a decade could mean you need to more than double the amount you invest to end up with a nest egg of similar size. 

This chart below shows roughly how much you'd have at age 65 if you began saving at different ages and kept your savings rate the same throughout your career, using a reasonable assumption of an 8% rate of return. 

If You Save This Much a Month

Starting at 25, You'll Have This at 65

Starting at 35, You'll Have This at 65

Starting at 45, You'll Have This at 65

Starting at 55, You'll Have This  at 65

Starting at 60, You'll Have This  at 65

$100

$349,100

$149,000

$58,900

$18,300

$7,350

$250

$872,750

$372,600

$147,250

$45,7506

$18,400

$500

$1.75 million

$745,200

$294,500

$91,450

$36,750

$1,000

$3.49 million

$1.49 million

$589,000

$182,950

$73,500

Calculations by author. Assumes 8% return and use of tax-deferred account.

As you can see, if you started saving just $100 a month at age 25, you'd have close to $350,000 by age 65 -- but if you waited 10 years to begin saving, your nest egg would be just $149,000.

Over that 10-year period, if you invested just $100 monthly, you'd have put just $12,000 into your account -- but that $12,000 would've become more than $200,000 for you to spend during retirement. 

And, the more you save per month, the bigger the discrepancy in your final account balance if you wait a decade (or more) to start saving. 

You should start saving right now

You can't afford to make the mistake of waiting a decade to start saving -- especially since you'd need to invest so much more later in life to make up for a late start. You should start putting aside cash today. To do that:

  • Set a budget that prioritizes retirement savings. Retirement savings should be treated as a necessity each month, along with other requirements like food and rent. No money should go to discretionary purchases until you've set aside at least something for retirement. The younger you are when you start, the less you need to save to end up with enough to enjoy your senior years. 
  • Automate retirement contributions. If you have a 401(k) at work, sign up to have money automatically deducted from your paycheck and put into retirement accounts before you ever see the money. Do this when you get your first job, if you can. If you never see the money, you'll never get used to spending it. 
  • Help your kids prioritize retirement savings. Parents should encourage young adults to invest as much as possible for the future. If you can, help them to start investing in an IRA as soon as they earn any income at all. 
  • Increase your contributions gradually. If you can't start saving $500 or $1,000 a month right away, work up to saving as much as you can. Start by saving 5% of income, move up to saving 7% after two months, and slowly increase your savings until you're putting aside around 15% of your monthly income for retirement. If you make the change gradually, you probably won't even miss the money. 
  • Consider a side hustle: If you have very little extra income coming in, don't put off saving. If you do, then later you will need to invest much more. Instead, consider a second job. Even an extra $250 a month could make it possible for you to save a generous nest egg if you start early. 

Whatever steps you need to begin saving at least something for retirement, take them now to avoid the major mistake of delaying.  

A decade makes a huge difference

As the chart in this article shows, 10 years of your life can make all the difference when it comes to how secure your retirement is. You'll never get any younger, so make this the day you begin saving for your future. 

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