Distant retirement… or an opportunity to seize right now?
It’s perfectly normal to think that retirement, when you’re in your twenties, thirties, or even forties, is a topic that can wait. After all, between building a career, raising a family, and funding immediate projects, retirement can feel abstract, distant, almost unreal.
But that impression is misleading. In reality, time is your greatest ally or your worst enemy. The earlier you start, the less effort it takes. The longer you wait, the more you’ll have to make up for it with higher contributions, more stress… and less flexibility.
1. The magic effect of compound interest: time makes you wealthier
One of the most powerful principles in finance is compound interest: the returns on your investments generate returns of their own… and the more time you give them, the more exponential their effect becomes.
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Marie starts contributing $3,000 per year at age 25, for only 10 years — until age 35.
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Julie starts contributing $3,000 per year at age 35, until age 65 — for 30 years.
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Rate of return: 6%.
At age 65, Marie, who contributed a total of $30,000, will have about $265,000.
Julie, who contributed $90,000, will have about $245,000.
Conclusion: The one who starts early, even with little, has an advantage that money alone can’t make up for.
2. Waiting costs more… and hurts more
When you start late, you have to:
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contribute much more to make up for lost time;
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potentially take on more risk to seek higher returns;
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live with greater uncertainty or even postpone your retirement or lower your standard of living.
To accumulate $500,000 by age 65 at a 6% return,
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someone who starts at 25 needs to save about $3,500 per year;
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at 40, they’ll need to save about $9,000 per year;
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at 50, it will be nearly $20,000 per year.
The longer you wait, the harder you have to work… or the more you have to hope.
Thinking about retirement doesn’t necessarily mean dreaming about being 65, a golf course, and an RV.
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At what point do you want to have the choice to stop working?
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And what if you needed to change careers or reduce your hours?
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And what if you had to change careers or cut back your hours?
Starting early means buying yourself time for later. It’s not about being obsessed with retirement it’s about preparing for your independence.
When retirement feels far away, it’s not about overhauling everything. It’s about starting one good habit now: setting aside a regular amount, no matter how small.
- 100 $ par mois dans un CELI ou un REER
- invested in a well-diversified portfolio
- with automatic reinvestment of returns
It can add up to more than $100,000 after 30 years effortlessly. And the more you gradually increase it over time, the greater the impact.
Starting young also helps you avoid:
- bad debt (credit cards, unnecessary loans) ;
- unplanned withdrawals from RRSPs or TFSAs ;
- rushed or emotional decisions at 55 or 60;
- the regret of “not having started earlier.”
A financial plan started early is flexible, adaptable, and realistic. It adjusts to your life. It grows with you. And it protects you from future setbacks.
Thinking that retirement is too far away to act today is a dangerous illusion. The longer you wait, the higher the cost.
But the earlier you start, the less you have to do… and the more you gain.
It’s not a sprint it’s a marathon. And the winners aren’t those who finish first.
They’re the ones who started moving forward right now.
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Vanguard, Start early, stay invested, 2022
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Statistics Canada, Saving Habits of Canadians, 2023
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AMF, Why Saving Early Is Advantageous, 2021
