If you’ve just started working at your first real job, you may be earning more money than ever. You could have new expenses, too. If this is your first time living independently, you’re now responsible for paying for rent and utilities, groceries, gas, insurance and all your other living expenses. Plus, you may be paying off student loans and saving for a new car. Setting aside money for retirement might not seem like a sensible thing to do right now. But this really is the ideal time to save.

Saving for retirement while you’re in your twenties gives your savings more time to benefit from potential compounding. Compounding occurs when investments generate earnings and the reinvested earnings generate additional earnings. You therefore have the potential to earn returns on your contributions and your earnings. The longer the compounding process has to repeat itself, the larger your account balance may be at retirement.

A plan makes saving easy

Saving for retirement is very convenient with your employer’s plan. You don’t have to make a special trip to the bank or write a check each month. Your plan contributions are automatically deducted from your paycheck each pay period and put into your plan account. Because you don’t receive that money, you aren’t tempted to spend it instead of saving it. Try to increase your contribution whenever you can.