When Should I Start Saving for Retirement?

Retirement may seem like a far-off milestone, especially if you are in your 20s or 30s. With daily expenses, bills, and unexpected financial needs, it is easy to push retirement savings to “someday.” But the truth is that the best time to start saving for retirement is as early as possible. The sooner you begin, the more time your money has to grow, and the less pressure you will feel later in life.

The Power of Starting Early

One of the biggest advantages of saving early is the power of compound interest. This means that not only does the money you save earn interest, but the interest itself begins to earn interest over time. The longer your money has to compound, the larger your retirement fund will be.

For example, if you start saving Sh10,000 per month at age 25 with an average return of 8% per year, by age 60 you could have over Sh20 million. If you wait until age 35 to start, you would only have about half that amount. The difference is not in how much you save but in when you start.

Saving in Your 20s

Your 20s are the ideal time to start. At this stage, even small contributions can grow significantly by the time you retire. While you may have student loans, rent, or an entry-level salary, setting aside a small percentage of your income creates strong financial discipline and takes advantage of your long investment horizon.

Saving in Your 30s

If you missed starting in your 20s, your 30s are still a great time. By now, you may have a higher income and a clearer idea of your financial goals. This is also when many people start families, buy homes, or face larger financial responsibilities. Even so, allocating a consistent portion of your income toward retirement ensures you won’t be forced to play catch-up later.

Saving in Your 40s and Beyond

Starting in your 40s or 50s is still possible, but it may require more aggressive saving. At this stage, your focus should be on maximizing contributions, reducing unnecessary expenses, and investing wisely to catch up. Governments and pension schemes often allow higher contribution limits for older savers, making it easier to boost your retirement fund.

Key Considerations

Start now, regardless of age: The best time to start was yesterday, but the next best time is today.
Automate savings: Set up automatic transfers into retirement accounts so you stay consistent.
Increase savings with income growth: As your salary grows, increase your contributions instead of expanding your expenses.
Diversify investments: Don’t rely only on savings. Invest in retirement plans, stocks, bonds, and real estate to grow wealth.