The simple answer: today.
Time is the most powerful tool in your retirement planning toolkit. The earlier you start saving, the more you benefit from compound growth—often making a bigger impact than how much you contribute.
Years ago, my brother-in-law shared a booklet by A. L. Williams titled Common Sense: A Simple Plan for Financial Independence. In it, Williams illustrates the power of compound interest by comparing two individuals with very different saving habits.
While the example assumes a 12% rate of return—which may not reflect today’s market conditions—the underlying lesson remains just as relevant: time matters more than timing.
The Scenario
- Individual A opens a qualified plan (such as a 401(k), 403(b), or IRA) and contributes $2,000 per year for six years—then stops contributing altogether.
- Individual B spends $2,000 annually for the first six years, delays investing, and then contributes $2,000 per year for the next 37 years.
The Outcome
By age 65:
- Individual A contributes a total of $12,000
- Individual B contributes a total of $74,000
Yet despite contributing far less, Individual A ends up with nearly the same accumulation as Individual B—all because they started earlier and gave their investments more time to grow.
The Lesson
This example highlights a critical truth:
Starting early can be more valuable than contributing more later.
Even modest contributions, when given enough time, can grow significantly through the power of compounding.
So, the question becomes:
How does your current savings strategy measure up?
| Individual A | Individual B | |||
| Age | Contribution | Accumulation At End of Year | Contribution | Accumulation At End of Year |
| 22 | $2,000 | $2,240 | 0 | |
| 23 | $2,000 | $4,749 | 0 | |
| 24 | $2,000 | $7,559 | 0 | |
| 25 | $2,000 | $10,706 | 0 | |
| 26 | $2,000 | $14,230 | 0 | |
| 27 | $2,000 | $18,178 | 0 | |
| 28 | 0 | $20,359 | $2,000 | $2,240 |
| 29 | 0 | $22,803 | $2,000 | $4,749 |
| 30 | 0 | $25,539 | $2,000 | $7,559 |
| 31 | 0 | $28,603 | $2,000 | $10,706 |
| 32 | 0 | $32,036 | $2,000 | $14,230 |
| 33 | 0 | $35,880 | $2,000 | $18,178 |
| 34 | 0 | $40,186 | $2,000 | $22,599 |
| 35 | 0 | $45,008 | $2,000 | $27,551 |
| 36 | 0 | $50,409 | $2,000 | $33,097 |
| 37 | 0 | $56,458 | $2,000 | $39,309 |
| 38 | 0 | $63,233 | $2,000 | $46,266 |
| 39 | 0 | $70,21 | $2,000 | $54,058 |
| 40 | 0 | $79,320 | $2,000 | $62,785 |
| 41 | 0 | $88,836 | $2,000 | $72,559 |
| 42 | 0 | $99,499 | $2,000 | $83,507 |
| 43 | 0 | $111,438 | $2,000 | $95,767 |
| 44 | 0 | $124,811 | $2,000 | $109,499 |
| 45 | 0 | $139,788 | $2,000 | $124,879 |
| 46 | 0 | $156,563 | $2,000 | $142,105 |
| 47 | 0 | $175,351 | $2,000 | $161,379 |
| 48 | 0 | $196,393 | $2,000 | $183,005 |
| 49 | 0 | $219,960 | $2,000 | $207,206 |
| 50 | 0 | $246,355 | $2,000 | $234,310 |
| 51 | 0 | $275,917 | $2,000 | $264,668 |
| 52 | 0 | $309,026 | $2,000 | $298,668 |
| 53 | 0 | $346,111 | $2,000 | $336,748 |
| 54 | 0 | $387,644 | $2,000 | $379,398 |
| 55 | 0 | $434,161 | $2,000 | $427,166 |
| 56 | 0 | $486,261 | $2,000 | $480,665 |
| 57 | 0 | $544,612 | $2,000 | $540,585 |
| 58 | 0 | $609,966 | $2,000 | $607,695 |
| 59 | 0 | $683,162 | $2,000 | $682,859 |
| 60 | 0 | $765,141 | $2,000 | $767,042 |
| 61 | 0 | $856,958 | $2,000 | $861,327 |
| 62 | 0 | $959,793 | $2,000 | $966,926 |
| 63 | 0 | $1,074,968 | $2,000 | $1,085,197 |
| 64 | 0 | $1,203,964 | $2,000 | $1,217,661 |
| 65 | 0 | $1,348,440 | $2,000 | $1,363,780 |