Here's The Difference Between Someone Who Starts Saving At 25 Vs. Someone Who Starts At 35

Andy Kiersz

If you want to have a comfortable retirement, it is very important to begin saving early. It's a point that can't be reiterated enough.

Here is another example why.

Consider two hypothetical savers — Emily and Dave. Emily puts $200 per month into a retirement account with an estimated 6% rate of return starting at 25. Dave starts saving $200 per month at 35 — just ten years after Emily.

Both continue to add $200 each month until they retire at 65.

By the time they are 65, Emily has contributed $96,000, while Dave has contributed $72,000.

Here's the trajectory of both of to those accounts.

Emily started saving just ten years earlier, and only put in about 33% more money into her account than Dave.

But by the time they are both ready to retire, Emily has almost twice as much as Dave — Emily has $402,492, and Dave has $203,118.

That extra ten years of compounding returns has made Emily's situation far better than Dave's when they are 65.

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For most people, $200,000 or $400,000 isn't enough to retire on: Want To Retire With $1 Million? Here's How Much You Need To Be Saving Right Now