Start Saving Now

Get in the habit early, even if it’s only a small amount with each paycheck.

If you don’t pay your rent or cell-phone bill, the consequences are immediate. If you fail to stash money in savings as soon as you start earning a paycheck, you probably won’t notice the damage right away. But the long-term fallout can be devastating if it limits your choices—whether that’s buying the house you want, sending your kids to a top college, or deciding when (or even if) you can retire.

As illustrated below for example, say Jane is 25 years old and puts $500 into a mutual fund that earns 8% a year, adding $100 each month. She’ll wind up with more than $335,000 by the time she's 65, excluding taxes. Richard, on the other hand, waits until he's 35, invests $2,500 and then adds that $100 a month. All else being equal he’ll have only about $167,000 by age 65.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Lisa Gerstner
Editor, Kiplinger Personal Finance magazine

Lisa has been the editor of Kiplinger Personal Finance since June 2023. Previously, she spent more than a decade reporting and writing for the magazine on a variety of topics, including credit, banking and retirement. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.