Saving for retirement in your 20s might not feel urgent. You’re just starting your career, managing rent, paying off student loans, and enjoying your social life. But here’s the truth: the earlier you start, the easier it will be to build a comfortable future. Thanks to compound interest, even small amounts saved now can grow into a large nest egg by the time you retire.

1. Understand Why Starting Early Pays Off
When you save early, your money earns interest, and then that interest earns interest. This snowball effect is called compound interest, and it’s one of the most powerful tools in personal finance. If you save $200 a month starting at 22, you could have hundreds of thousands more by retirement than if you start at 32, even if you save the same amount each month. Time in the market matters more than trying to time the market.

2. Set a Retirement Goal
Before you start saving, decide what you’re saving for. Think about your desired lifestyle, where you might want to live, and how inflation will affect costs over time. Use an online retirement calculator to get an idea of how much you’ll need. Even if the number seems big, remember you have decades to get there.

3. Choose the Right Retirement Accounts
If your employer offers a retirement plan like a 401(k) or 403(b), it’s usually the best place to start. These accounts often come with tax advantages and the possibility of an employer match. If you don’t have access to an employer plan, consider opening an Individual Retirement Account (IRA). Roth IRAs are especially appealing for young adults because you pay taxes now, and your withdrawals in retirement are tax-free.

4. Take Advantage of Employer Matches
Many employers will match part of what you contribute to your retirement account. This is free money that can help your savings grow faster. If your company matches 50% of your contributions up to 6% of your salary, aim to contribute at least that much to get the full match.

5. Automate Your Contributions
The easiest way to build savings is to make it automatic. Set up your payroll to send a percentage of your paycheck straight to your retirement account before you even see it. Automation keeps you consistent and removes the temptation to spend the money.

6. Start Small and Increase Over Time
If you can’t afford to contribute a lot right now, start with what you can. Even 3% of your paycheck is better than nothing. As you get raises or bonuses, increase your contributions by 1% or 2% each year. Over time, these small increases add up without putting a big strain on your budget.

7. Invest Wisely
In your 20s, you have decades before retirement, which means you can handle more risk in exchange for higher potential returns. Stocks, index funds, and target-date funds are popular choices for long-term growth. Keep fees low, diversify your investments, and don’t panic when the market dips.

8. Track Your Progress
Check your retirement account statements a few times a year. Look for steady growth over time, not daily changes. If you’re not on track, increase contributions or adjust your investments. Your needs and risk tolerance may change as you get older.

9. Avoid Early Withdrawals
Taking money out of your retirement account before you’re eligible can lead to penalties, taxes, and lost growth. Build an emergency fund so you won’t need to touch your retirement savings for unexpected expenses.

10. Keep Learning About Personal Finance
Financial literacy is an ongoing skill. Read books, listen to podcasts, and take free courses to understand investing, taxes, and money management. Staying informed will help you make better decisions as your income and responsibilities grow.

Saving for retirement in your 20s doesn’t require huge sacrifices. Start small, take advantage of free money from employer matches, and let compound interest do the heavy lifting. Your future self will thank you for the choices you make today.