When to start saving for retirement: A guide for every age

Saving for retirement can seem daunting. But whatever your age, it's never too late—or too early—to start saving. The more years your money has to grow, the less you'll need to contribute to meet your goal. But even if you're in your 40s or 50s, you still have time to make a difference.

You might have read that you should have saved a certain amount for retirement by a certain age. Targets like these can motivate you to reach broad retirement savings goals, but don't be discouraged if you aren't on the same trajectory or feel behind.

If you're wondering when to start saving for retirement or when to start 401(k) contributions, the answer is now. Everyone's financial situation has different challenges and opportunities, but you can make it work with the right knowledge and a little help.

The best time is now. While starting early, ideally in your 20s, allows you to maximize the power of compound interest and market growth over a longer time horizon, it's never too late to begin. Starting early means you'll have more income-earning years to set money aside, giving your savings more time to benefit from compounding interest and market potential.

You may not realize the opportunities you have for building retirement savings. If you're younger, you may be focused on simply accumulating any savings for your future, maybe including a college education or a down payment on a home. But when you have an income stream, consider allocating a portion of it toward your future retirement. Even a small windfall can have a strong impact. Explore long-term savings options, investment accounts or tax-advantaged retirement accounts. Understanding the basics of financial planning can help you make informed decisions about your retirement savings.

Time is a crucial factor in building retirement savings, and not just because of the potential years of earnings in which you can set money aside. If you saved $250 a month for 40 years in a no-interest account, you would have $120,000—the exact amount that you put in. So how do ordinary people retire as millionaires? It's not by saving $2,500 a month for 40 years to end up with $1.2 million. It's through the power of compounding interest and returns. Consider exploring different investment vehicles like mutual funds, stocks and bonds within your retirement accounts to potentially accelerate your wealth growth.

Compound interest means you earn interest not just on the money you deposit but also on the interest that accumulates over time. The longer you leave your money to grow, the more interest you'll earn because it keeps building on itself.

Here's an example of the difference compound interest can make if you leave it untouched using the starting ages of 25 and 50 and seeing where it gets you by age 65:

In addition to accounts with interest, many people use investment accounts to save for retirement. This opens up not just compound interest, but compound returns. Tax-advantaged retirement accounts are designed for you to deposit money and leave it to grow until you reach at least age 59½. The investment gains made in these accounts are tax-deferred, which encourages people to let those investment returns be re-invested so that they also have growth potential.

If you don't have a retirement account or think you haven't saved enough yet, you're not alone. The Federal Reserve reports that only 67% of U.S. adults who aren't yet retired have savings specifically for retirement. Just 34% of Americans felt they were on track to have enough to live on.

Across all households, the average amount people had saved for retirement was about $334,000, according to the Fed, although the median (or exact midpoint) was just $87,000. Here's what the Fed reports as the average and median retirement savings across age groups:

While statistics can provide a helpful baseline, they can't—and don't—express where you should be or where you'll end up. What matters is how you react to your circumstances. If you want to start saving for retirement, there's no time like the present, and it doesn't have to mean overhauling your finances. You can start small and build momentum.

What has held you back from saving for retirement? Let's address the most common reasons people feel unprepared to start this important task and how you can take action.

If it feels like current expenses are taking up all your income, you have a couple of options. First, you might try one of these five types of budgets to see if you can find a new strategy to help you save. Second, you might think about ways to increase your income, whether that means asking for a raise, renting part of your property or starting a side business.

It's understandable: Your immediate needs and responsibilities are impossible to ignore without consequences. But ignoring your future also can cause problems when you get there. Block off time in your calendar to open a Roth IRA, learn about your employer's retirement plan match or research self-employed retirement accounts. Even if you can only put aside a small amount now, it can grow to be worth it.

Make the process easy on yourself. Rather than thinking about doing it each time, one of the best ways to save for retirement is to automate it. This might mean signing up for your employer's retirement plan so the money automatically goes from your paycheck to your employer-sponsored retirement plan. You also can set up automatic contributions from your bank account to other kinds of accounts, such as a money market savings or IRA.

You don't know where to open a retirement account, how much you should try to contribute, where to invest or how much you need to retire. The fear of making a mistake can mean you don't take any action at all. Start by seeking answers from multiple sources. Over time, you'll find the common threads and learn which sources you can trust. You also can try working with a financial advisor—someone you can trust to give you the right answer without having to sift through hundreds of search results to find it.

You can save for retirement in a savings or brokerage account, but if you want your money to go further, it's smart to choose one of the many types of tax-advantaged retirement accounts. These are the most common options:

• 401(k), 403(b) or 457(b) plan. These employer-sponsored plans allow you to save up to $23,500 of your salary in 2025. You can make additional catch-up contributions of $7,500 if you're 50 or older and $11,250 if you're between 60 and 63. Your employer may contribute to your plan as well.
• Traditional or Roth IRA. Whether you have a workplace plan or not, you can open an individual retirement account, or IRA. In 2025, these plans allow you to save up to $7,000 each year and up to $8,000 if you're 50 or older.
• To learn more about the specific rules and contribution limits for these tax-advantaged retirement plans, visit the IRS website.

The older you are when you start saving, the more you may need to save per month to reach your goal. But that doesn't mean you can't get there. At any age, there are reasons and strategies to start saving for retirement. It's also important to understand how your retirement savings factor into your Social Security benefits. You can find detailed information about Social Security retirement benefits on the Social Security Administration website.

You might think retirement is so distant that you don't need to start saving yet. But saving for retirement early can make it easier to reach financial freedom and maybe even retire early. Establishing a savings habit early and being disciplined about your financial needs vs. wants will help you maximize the potential of compounding interest—with time on your side. You also can consider allocating more money to aggressive investments that may be volatile short term but have higher long-term return potential.

Saving for retirement in your 30s means you might have higher expenses, like homeownership or raising children. But you also might have advantages you didn't have when you were younger, such as a stable, higher salary or no more student loans. If you're married, one spouse may be focused on child-rearing while the other focuses on breadwinning. In this case, the non-working or lower-earning spouse still can save for retirement through a spousal IRA.

A budget that helps you pay yourself first can make a big difference in saving for retirement in your 40s. That's especially true if you're feeling pulled in too many directions. You might have a parent who needs caretaking or financial help and kids with pricey extracurriculars—on top of your own living expenses. Remember that you can't help others if you don't help yourself first. It makes sense to put away some of your money to ensure your own future financial stability. Consider different accounts each with a specific purpose to increase prioritization.

If you're in your 50s or 60s and still working, you aren't too late to save for retirement. You can cover a lot of ground through catch-up contributions to your employer account or IRA. Take into consideration that you won't need your entire nest egg the day you retire. You'll still have time to earn compound interest and returns, though you'll probably want your asset allocations to be more conservative than when you were younger.

Whatever your age, there's a path for you to start saving for retirement right away, even if it's just a bit at a time. Connecting with a Thrivent financial advisor can help you get your questions answered, build confidence and lay the foundation for your financial future.