The Long-Term Impact of Waiting to Save for Retirement

At some point, working may no longer be possible or desirable. When that happens, the money you’ve saved will need to cover your expenses. Social Security may help, but it likely won’t be enough. Without pensions or other guaranteed income sources, individuals now carry more of that responsibility on their own. Starting earlier gives you more time to build what you’ll eventually need.

Why Compounding Rewards Early Savers

Compounding plays a major role in making that possible. It lets the money you invest grow on its own, then lets those returns grow too, as Investopedia explained in an August 2024 breakdown of how compounding works. For example, investing $5,000 at age 25 with a hypothetical 7% annual return could grow to nearly $75,000 by age 65. Waiting until age 35 could cut that total in half. This example is for illustrative purposes only and does not reflect actual investment results, which will vary. Time makes a big difference, and the more of it you give your money, the better your position can be.

Don’t Leave Your Employer Match on the Table

Missed employer contributions carry a real cost, too. Plansponsor’s 2024 review of how 401(k) matching works lays out exactly what’s at stake: If your company offers a match and you don’t contribute enough to receive it, you’re giving up free money. Over time, that match, along with the returns it could have earned, adds up. Saving isn’t just about your own contributions. It’s about taking full advantage of what your employer already offers.

Why So Many People Put Off Saving

Many people delay saving not because they lack the funds, but because they’re unsure of what to do. Many assume it will be easier to start later, once income grows. But expenses tend to grow with income too, and over time, it can get harder to carve out room to save. Early in your career, before other financial commitments take hold, you may have more flexibility than you think.

Know What Your Retirement Plan Offers

One of the most helpful steps is understanding what your plan offers. Learn the match policy and review the investment options. Check whether your plan has a dedicated advisor and schedule time to talk. That kind of guidance is usually available at no extra cost, and it can keep you from making decisions in the dark. Too often, people default into conservative investments that don’t reflect their timeline. If you don’t plan to touch the money for decades, you may be able to take on more growth exposure than you realize.

Staying Disciplined Through Market Volatility

When markets swing and headlines focus on inflation, investors begin to second-guess their allocations. MarketWatch reported in May 2025 that market volatility remained above its historical average, and Savant’s own Q2 market review highlighted the importance of maintaining a long-term investment strategy during periods of market uncertainty. This second-guessing shows up most in individual accounts, where investors haven’t set a clear plan. When someone hasn’t set aside enough in conservative assets, and the market drops, the temptation to sell grows strong. But when investors build the right balance into their portfolio from the start, they tend to feel more confident staying invested. Planning ahead matters more in those moments than anything else.

Revisiting Your Risk Tolerance

If your allocation doesn’t feel right, don’t wait for conditions to improve before acting. That discomfort is usually a sign it’s time to revisit your risk tolerance. Talk with a Savant financial advisor and make a plan to adjust your allocation so that it better fits your individual circumstances.

It’s Not Too Late to Start

Getting started late isn’t ideal, but it’s not the end of the road either. There’s always a place to start, so don’t get discouraged. Take the next step, even if it’s small. Use the tools your employer provides, ask questions, and get clarity.

The sooner your money starts working, the more options you’ll have down the line. Compounding takes time, but it also needs action. Even small steps today can set you up for more freedom later. If you’re not sure how to start retirement planning, your Savant advisor is here to help.

This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment professional regarding your unique situation.