Money · Investing and retirement

Why starting early matters

Compounding means your returns earn returns, so time matters more than amount. The SEC's numbers, assuming a 7% average yearly return: to reach $1 million by 65, starting at 18 takes about $254 a month; starting at 35 takes $883; at 45, $2,033. Start with whatever you can, raise it when your pay goes up, and keep emergency money in savings, not investments.

Easy12 min to read; 10 min with the calculatorFreeChecked October 2, 2026

You'll need

The SEC's free compound interest calculator
A rough idea of what you could set aside each month

What to know

Interest that earns interest bends the line upward.

See compounding in small numbers. $100 earning 5% a year becomes $105 after one year and $110.25 after two, because year two also earns on the $5 of interest. Source: Investor.gov¹
Leave it alone and it keeps going: more than $162 in 10 years and almost $340 in 25, without adding a dime. Source: Investor.gov¹
Know the cost of waiting. Starting later means you need to invest more of your pay to reach the same goal. Source: Investor.gov³ See the table below.
Make it regular. Investing a set dollar amount or set percentage of your income is how compounding builds; when you get a raise, raise your contribution. Source: Investor.gov³ See Automating your savings.
Use the right account. If your job offers a 401(k) or 403(b), find out how it works and whether your employer matches what you put in. See 401(k), 403(b) and IRAs.
Keep fees low, because fees compound against you. In the SEC's example, $100,000 over 20 years ends near $208,000 with a 0.25% yearly fee and near $179,000 with a 1% fee. Source: Investor.gov⁵ See Index funds and fees.
Run your own numbers in the SEC's compound interest calculator.

Watch out Investing has no set rate of return. Some experts use 7% to 10% a year as a useful long-run estimate for diversified U.S. stock investments, based on history, but all investments involve risk and markets go up and down. Source: Investor.gov³ Higher returns come with higher risk, possibly including losing money. Source: Investor.gov⁶

What it takes to reach a goal by 65

Monthly investment needed, assuming a 7% average annual return. From the SEC. Source: Investor.gov³

Start at age	$500,000 by 65	$1,000,000 by 65
18	$127/month	$254/month
25	$209/month	$418/month
35	$441/month	$883/month
45	$1,016/month	$2,033/month
55	$3,016/month	$6,032/month

Small habits, real money

SEC examples at 5% a year. Source: Investor.gov²

Habit you skip	Saved per year	After 5 years	After 30 years
$1 candy bar a day	$365	$465.84	$1,577.50
$2 slice of pizza a day	$730	$931.69	$3,155.02

See it done

Video by Khan Academy Nonprofit

Saving enough for retirement

Watch on YouTube: Saving enough for retirement | Financial mathematics (TX TEKS) | Khan Academy

Full title on YouTube: “Saving enough for retirement | Financial mathematics (TX TEKS) | Khan Academy”2025 · Checked October 3, 2026

Video won't load at school or work? No problem. Everything you need is in the steps; the video's just a bonus. Watch it on YouTube later.

If it doesn't work

Feel like you're starting late? It's never too late; you'll just need to put in more, and every raise is a chance to bump it up. Source: Investor.gov³
No emergency fund yet? Build that first in a savings account. The SEC says savings is the right place for short-term goals and emergencies, and investing is for long-term goals. Source: Investor.gov³ See How much to save, starting small.
Tempted to spend instead? The SEC suggests a rule: wait 24 hours before buying anything on impulse. Source: Investor.gov²

Good to know

The details, if you want them. Tap a line to open it.

The Rule of 72

Divide 72 by the yearly return to estimate how many years it takes money to double. At 9%, about every 8 years. Source: Investor.gov¹

Time horizon

If retirement is 30 years away, you have time to ride out market ups and downs. Source: Investor.gov³

Take it with you

Printable card Download card (PDF)

Sources

U.S. Securities and Exchange Commission What is compound interest? (Investor.gov)
U.S. Securities and Exchange Commission Small savings add up to big money (Investor.gov)
U.S. Securities and Exchange Commission Introduction to investing (Investor.gov)
U.S. Securities and Exchange Commission Compound interest calculator (Investor.gov)
U.S. Securities and Exchange Commission Understanding fees (Investor.gov)
U.S. Securities and Exchange Commission What you can do to avoid investment fraud (Investor.gov)

Lesson M9.1 · Last checked October 2, 2026 against the sources listed.

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