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

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 $US200 per month into a retirement account with an estimated 6% rate of return starting at 25. Dave starts saving $US200 per month at 35 — just ten years after Emily.

Both continue to add $US200 each month until they retire at 65.

By the time they are 65, Emily has contributed $US96,000, while Dave has contributed $US72,000.

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

Saving at 25 vs saving at 35 continued saving prettier

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 $US402,492, and Dave has $US203,118.

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