Retirement usually comes at the end in the list of financial goals of most people. They usually start saving for it when they are near the end of their working life. The focus, instead, is on intermediate goals. They save for the car they want in the next three-four years or the house they plan to buy in the next 10 years. They forget retirement as it is far away. They think they can start saving for it after other big obligations such as home loan and children's education/marriage are over. This is a wrong approach.
Starting early has many advantages. If you do that, your money gets more time to grow. Each gain generates further returns. As time passes, you miss out on this benefit, called compounding, which can grow money exponentially over time.
For example, if you start saving Rs 5,000 per month at 20 and earn 12% returns every year, you will have Rs 5.94 crore when you retire at 60. But if you start at 30, you will be able to accumulate just Rs 1.76 crore. The 10 additional years that you give your money to grow can do wonders for your financial well-being.
The more you delay, the more you will have to save per month. For example, if your age is 20 and you want Rs 5 crore by the time you are 60, you will have to save just Rs 4,207 a month for the next 40 years, assuming that the rate of return is 12%. If you delay till 25, you will have to almost double your savings (Rs 7,698 every month for the next 35 years). "Starting early can help you build a larger fund and give you flexibility for taking up entrepreneurial or other pursuits close to your heart"
Experts also say that people who don't start saving early generally make riskier investments decisions later in life. So, start saving as soon as possible.