Starting Late Costs More Than You Think: Retirement Planning with Kavan Choksi

Retirement planning is often framed around how much someone should save, but timing can matter just as much as the amount. The longer money has to grow, the more compounding can do the heavy lifting. That is why Kavan Choksi emphasizes the cost of delay: waiting several years to begin can mean having to contribute far more later to reach the same goal.

The principle is simple. Compounding allows investment returns to generate further returns over time. In the early years, the effect can seem modest, but the difference becomes much more noticeable over decades. Someone who starts investing in their twenties may contribute less overall than someone who begins in their forties and still finish with a larger retirement pot, simply because the money has had longer to grow.

This does not mean people who start late are doomed. It does mean the maths becomes less forgiving.

Time Can Matter More Than Contribution Size

Consider two investors aiming for the same retirement age. One starts early with relatively small monthly contributions, while the other waits and then contributes significantly more. The late starter may eventually catch up, but only by committing a larger share of income over a shorter period.

That creates an important distinction between saving harder and saving longer. Saving harder requires more money today. Saving longer allows time itself to become part of the strategy.

For younger investors, this is one of the strongest arguments for starting before retirement feels urgent. Contributions made early may appear insignificant compared with future earnings, but they have the greatest amount of time to compound. Delaying until income is higher can feel sensible, yet it gives every future contribution fewer years to grow.

The irony is that retirement planning often feels least important at the point when time is most valuable.

Delays Tend to Compound Too

The cost of waiting is not limited to missed investment returns. Delaying retirement saving can create other pressures later.

A person who begins late may need to increase monthly contributions just as other financial commitments become more expensive. Mortgage payments, education costs, caring responsibilities or higher household expenses can all compete for the same income.

That can make catching up difficult even for someone earning substantially more than they did earlier in life.

There is also less room for mistakes. An investor with thirty or forty years ahead can recover from weak market periods, adjust contributions and change strategy gradually. Someone with a much shorter horizon may have fewer opportunities to make up lost ground.

This does not necessarily mean taking more investment risk. In fact, taking excessive risk in an attempt to compensate for lost time can create an entirely new problem. A shorter time horizon often means there is less opportunity to recover from a large loss.

Employer Contributions Change the Picture

One of the most expensive mistakes can be ignoring employer-sponsored retirement plans.

Where an employer offers matching contributions, failing to participate fully can mean giving up part of the compensation package. The employee is not simply missing their own contribution; they may also be missing money the employer would have added.

Over long periods, those lost contributions can compound just like personal savings would have.

The same applies to tax advantages. Depending on the retirement account and jurisdiction, contributions may receive favorable tax treatment or investments may be allowed to grow in a more tax-efficient environment. Delaying participation can therefore mean losing both time in the market and years of potential tax benefits.

This is why retirement planning should not be viewed only as a question of choosing investments. Account structure, contribution rates and employer benefits can matter just as much.

Inflation Raises the Target

Another reason delay can be costly is that the amount needed for retirement does not stand still.

Inflation gradually increases the cost of housing, food, healthcare, travel and everyday expenses. A retirement target that looks comfortable today may be inadequate decades from now.

That means savers are trying to achieve a moving target.

The longer someone postpones planning, the less time there is to adjust contributions as assumptions change. Higher inflation, weaker investment returns or an earlier-than-expected retirement can all increase the amount required.

Starting earlier provides flexibility. Contributions can be increased gradually, rather than requiring a sudden and uncomfortable jump later.

Lifestyle Expectations Matter Too

Retirement is not one standardized financial goal.

One person may expect relatively modest expenses and plan to remain in a mortgage-free home. Another may want extensive travel, help family members financially or maintain a more expensive lifestyle. Healthcare needs and longevity add further uncertainty.

That makes the phrase “save for retirement” far too vague on its own.

A useful plan needs some idea of expected spending, likely retirement age, other income sources and how long the money may need to last. These assumptions will never be exact, but even a rough framework is better than relying on a generic percentage without understanding what it is supposed to achieve.

Starting early also makes those assumptions less intimidating. There is time to refine the plan as circumstances change.

Catching Up Is Possible

For someone who has delayed saving, the most productive response is usually not regret but adjustment.

Later starters can still improve their position by increasing contributions, taking full advantage of employer matches, reducing unnecessary fees and reviewing how retirement savings are invested. Working slightly longer can also have a significant effect because it creates more years of contributions while reducing the number of years the portfolio needs to support.

The key is to avoid treating lost time as a reason to take reckless risks.

A late starter may feel pressure to chase unusually high returns, but higher expected returns generally come with higher risk. If that strategy goes wrong close to retirement, the damage can be harder to recover from.

A stronger approach is usually to focus on the factors that can actually be controlled: how much is saved, how consistently contributions are made, how expensive the investments are and how realistic the retirement goal remains.

Small Starts Can Still Be Valuable

One of the biggest psychological barriers to retirement saving is the feeling that the amount available today is too small to matter.

That can lead people to wait until they are earning more.

The problem is that waiting can easily become a habit. A better salary brings new expenses, and the ideal moment to start keeps moving further away.

Even modest contributions can establish the habit and put time to work. They can be increased later as income rises.

This is where the advantage of an early start becomes practical rather than theoretical. It reduces the pressure to get everything exactly right from the beginning.

Retirement planning does not require a perfect forecast of future income, market returns or expenses. It requires enough time and consistency for adjustments to remain possible.

That is ultimately the real cost of delay. It is not simply the investment return that might have been earned. It is the loss of flexibility.

The earlier the process begins, the more options remain available. The later it begins, the more the plan depends on higher contributions, stronger returns or a longer working life to make up the difference.