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Investing for retirement is one of the things that is best done as early as possible. Preferably when you start your career and still in your 20s. But there are many reasons why it might not work.

I am a brand new pension investor who opened my first ever pension account just a few months ago at the age of 40. This is how I got to this place – and what I intend to do now that I’m here.

A late start to pension savings

How did I become a middle-aged first-time investor in retirement? There is a combination of factors. But the transitions were living paycheck to paycheck on low wages in my last career, along with having to pay off student loans.

I also knew nothing about investing. I grew up in a household with multiple small businesses and an often shaky financial situation, rather than parents with office jobs who contributed diligently to employer retirement accounts.

When I switched careers from non-profit museum operations and management in 2021 to creating digital content, I also started freelancing. Later, I ditched the W-2 to become a full-time freelancer. I also focused on paying off high-interest debt and saving money to buy a house (a goal I prioritized, with the aim of improving my current living situation).

Finally, a few months ago, I got my long-awaited mortgage and new home. That meant I had the solid financial foundation I needed to start investing. I decided to open a traditional IRA with a financial institution where I already have a checking and high yield savings account. I chose a robo advisor account to make the process as painless as possible.

Will investments still pay off at this point?

I will need to invest significantly more money to reach my goals than I would have started before. Even so, it’s still worth investing now. Compound interest will still work in my favor, even over a shorter period of time.

Let’s say I wanted $500,000 in my IRA when I reached age 65. Here’s a look at how much I need to contribute each month to make it happen, now at age 40 compared to when I was 25. This is based on an initial contribution of $1,000 and a fairly conservative return of 8 %:

Data source: Author’s calculations, using the Investor.gov Savings Goal Calculator.

With this goal in mind, I have set up automatic contributions of $125 per week to my IRA. This doesn’t quite add up to my $7,000 annual contribution limit, but it’s close enough that I can make up the difference by contributing extra money a few times a year. And when I turn 50, I’ll be able to add even more to the account in the form of a catch-up contribution (currently $1,000, but I expect the IRS limits will change over the next decade).

Three steps to start building a nest egg today

Are you like me, seeing more wrinkles and the occasional gray hair in the mirror and wondering if it’s too late to invest for retirement? Good news – it’s not. Here’s how to get started.

1. Choose a stockbroker

Good news on this front – we’ve done the hard work for you. Click here for a list of expert-reviewed stockbrokers. Many of them offer tax-advantaged retirement accounts along with taxable options.

You can also check out our favorite brokers for IRAs especially. And if your employer offers a 401(k), it’s worth considering, especially if some of your contributions will be matched because it’s free money.

2. Consider a robo-advisor

I have many skills, but I have a decided lack of experience in choosing investments (and not a lot of time and energy to learn how). So I chose an IRA with a broker that offers robo-advisory services. It’s cheaper than using a human advisor, and it was very easy to set up. Check out our picks for the best robo-advisors for beginners.

I filled out a questionnaire to determine my risk tolerance and investment goals and opened the account with $1,000. The contributions I make each week are automatically invested for me in a diversified mix of ETFs and bonds — no fuss, no fuss.

3. Set up automatic contributions

I’ll be the first to admit that I’m generally not a fan of automatic bill pay and automatic savings account transfers. But investing is different. I don’t want to risk forgetting to make these extremely important transfers for my future financial security. My automatic contributions are weekly and small enough that I don’t worry about overdrawing my checking account.

Slow and steady wins the race

I feel a pang of regret when I look at the math and see that I could have reached a large nest egg by age 65 with much less money if I had started 15 years ago. But I can’t go back in time – I have to keep moving forward. I’m glad I managed to find my way to invest for retirement eventually.

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