Social Security won't cover all of your bills in retirement. You can expect those benefits to replace about 40% of your job-related income if you're an average earner, but most seniors need a lot more money than that to keep up with their bills in retirement. That's where personal savings come in, whether in the form of an IRA or 401(k). But new data from Transamerica reveals that the among today's retirees who made an effort to save independently, the median age they started at was 40. And that means a lot of seniors lost out on a key opportunity to amass wealth for their later years.

The importance of starting early

When it comes to growing wealth for retirement, the greatest weapon we have at our disposal is time. Savings housed in an IRA or 401(k) plan don't just sit there and do nothing; they get invested (or at least they should). And the best way to take advantage of that investment growth is to give ourselves as many years to save as possible.

Older man at laptop holding receipt

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Imagine you start socking away $300 a month for retirement at age 40 and retire at 65. If your investments in your retirement plan give you an average annual 7% return, which is a few percentage points below the stock market's average, you'll wind up with about $227,700. Of that, you're looking at $137,700 in gains in your retirement plan, since you'll have contributed $90,000 over the course of those 25 years ($3,600 a year x 25 years).

But now imagine you start saving that $300 a month at age 30 instead. Suddenly, you have a 35-year savings window, not 25. Assuming that same 7% return, your ending retirement plan will be around $497,600. That represents a gain of $371,600 when you factor in the $126,000 you'll be putting in yourself ($3,600 a year x 35 years).

You can't help but note the difference between these two savings approaches. Therefore, while you may be inclined to put off retirement savings until a bit later in life, the reality is that the sooner you start, the more your money stands to grow. And that could spell the difference between enjoying your golden years or having to really pinch pennies throughout.

Get started today

What's the best way to get started with retirement savings? If it's not something you're already doing, make the process automatic so you don't stray from your goals.

If you can afford to part with $100 a month right now, sign up to have that sum deducted from your paychecks and put into your 401(k), or find an IRA with an automatic transfer feature and arrange for that $100 to leave your checking account each month and land in your retirement account. And also, don't worry if you can't afford to save a lot at first. Socking away $25 a month for retirement in your early 20s is better than saving nothing, and then as your income increases, you can ramp up your contributions.

Your goal should be to retire with enough money to live comfortably and not have to worry about covering your expenses. Push yourself to start saving from as young an age as possible, and you'll increase your chances of doing just that.