What is one disadvantage of starting to save for retirement too late?

Saving for retirement late can significantly impact the benefits derived from compound interest. When an individual starts saving later in life, they miss out on the early years when their contributions have more time to grow through interest compounding. Compound interest works on the principle that not only does the principal amount earn interest, but the accumulated interest also earns interest over time. As a result, if savings are started later, there is a shorter time frame for money to grow, which ultimately leads to a lower total savings amount by retirement age.

For example, even a small amount saved early in life can grow substantially over several decades due to compounding, whereas a higher amount saved over a shorter time frame will not accumulate as much. This dynamic illustrates the critical importance of beginning retirement savings as early as possible to maximize the benefits of compounding and ensure sufficient funds are available in retirement.