“Target to save and invest at least 10% of your income, no matter how little or how much you make,” says Steve Vernon, retirement-planning expert and president of Rest-of-Life Communications. The sooner you start, the more wealth you’ll be able to build, Vernon says.
Even small amounts can add up over time. If you save and invest just $5,000 a year in a tax-deferred account starting when you’re 25 and earn a 6% rate of return, that will have grown to $773,809 by the time you’re 65. Alternately, even older workers can benefit — it’s never too late to start building up your retirement nest egg, you’ll just need a more aggressive savings plan. If you sock away $15,000 a year for 15 years before you retire into a tax-deferred account that yields a 6% rate of return, you’ll still have $349,139 by the time you reach retirement.