Here’s how much to save for a comfortable retirement - at any age

‘Time is the most critical piece of building wealth and preparing for retirement,’ one expert said

Having a comfortable retirement isn’t just about the decisions made once someone stops working. In fact, financial choices made decades earlier can have a huge impact.

Saving and investing early in life is the one decision that can have the biggest impact on retirement, several financial experts told The Independent. Simply put, the sooner you start, the better, said certified financial planner Jordan Vlastuin, founder of Make the Memory Financial Planning.

“Start investing now,” Vlastuin told The Independent in an email. “Time is the most critical piece of building wealth and preparing for retirement. The earlier you start, even if it's small contributions, the more you will have invested when you are ready to retire.”

But don’t fret if you’ve put off preparing for your golden years - financial experts say it’s never too late to get started. You just might have to make a few more sacrifices than if you kicked off in your twenties or thirties.

Saving early maximizes the impact of compound interest - interest on your contributions and past interest growth - effectively speeding up how much your balance increases over time.

But don’t fret if you’ve put off preparing for your golden years - financial experts say it’s never too late to get started (AFP via Getty Images)

Savings roadmap

A critical part of building retirement savings through investing and other avenues is knowing how much to save based on age.

If your goal is to live comfortably during retirement, saving $245 monthly from 20 years old can generate $2 million by the time you turn 67. But this target amount will likely rise over time with inflation; having a financial planner or advisor at your side can help you know if you’re on track.

Here’s a look at how much an individual, at different ages, would need to save monthly to retire at 67 with $1 million, $2 million or $3 million, assuming an 8 percent return (the average inflation-adjusted stock market return over the past five years, according to SoFi). The Independent used a NerdWallet retirement calculator to generate contribution amounts.

Monthly contributions for a $1M retirement:

• 20 years old: $160
• 25 years old: $245
• 30 years old: $370
• 35 years old: $565
• 40 years old: $875
• 45 years old: $1,395.

Monthly contributions for a $2M retirement:

• 20 years old: $325
• 25 years old: $485
• 30 years old: $735
• 35 years old: $1,130
• 40 years old: $1,755
• 45 years old: $2,800.

Monthly contributions for a $3M retirement:

• 20 years old: $485
• 25 years old: $730
• 30 years old: $1,105
• 35 years old: $1,690
• 40 years old: $2,630
• 45 years old: $4,190.

Sacrifice now, smooth sailing later

Granted, if you want a $3 million retirement fund, coming up with $485 a month at 20 years old may be tough. But making some early sacrifices - cutting back on going out on the weekend or getting food deliveries, for example - means that monthly contribution becomes easier to stomach as your career progresses and you earn more. If you’re not keen on doing without, your early 20s is the time when you have more energy to take on overtime, or a side hustle.

Start saving early and those contributions can become easier to fund later in life (AP Images)

“Giving yourself the gift of time allows for the ups and downs of various investments and will smooth out your returns,” certified financial planner and CardRates.com personal finance expert Bobbi Rebell said in an email to The Independent. “Time is finite, but it can also be magical for your money.”

Make it automatic

To protect retirement contributions, automated saving and investing is key, said Derek Brainard, a certified financial planner and director of financial education at nonprofit law educator AccessLex Institute.

“The single most powerful retirement move you can make is to automate savings as early as possible, long before you feel ready to retire,” Brainard told The Independent in an email. “Consistency and time matter more than the perfect investment choice.”

One of the easiest ways to automate retirement savings is to make contributions to an employer-based 401(k). Employers typically match contributions up to a certain amount, and allow employees to pick their contribution percentage.

For those who don’t have a 401(k) option through work, other vehicles such as IRAs and solo 401(k)s provide easy ways to automate retirement savings contributions.