You know what’s the hardest part of accumulating enough money for a comfortable retirement? Your biggest obstacle is not financial – it’s mental. For instance, most of us aren’t even thinking about a retirement fund when we hit our early 20s – it's so far away!

But that’s the point, isn’t it? It’s easy to say, “I’ll start on adult responsibilities like a retirement plan when I hit 30”, but why wait? Especially if you know that starting to save in 10 years’ time will mean you have to save more every month, just to end up with the same amount at retirement as you’d have if you had started now.

Waiting 10 years could almost halve your return

The maths is clear: if you save R1,000 per month in a typical retirement investment for 40 years, you will end up with a retirement amount equivalent to almost R1,5 million (in terms of its value and purchasing power today). Do the same for 30 years, and the amount is around R800,000. A 10-year delay can nearly halve your retirement funding.

When you understand the magic of compound interest, and how an extra 10 years of saving work for you instead of against you, you’ve won half the mental battle. The other half is a firm commitment to not blowing all your income every month.

We’re always quick to make excuses for why we're not saving at least 15% of our income – that’s the percentage of gross income you should save for 40 years for a comfortable retirement – especially when we’re young. And a hectic social life is so important.

Here’s the thing, though: it’s not only young people who save less than 15%. Most of us do, and that can lead to problems when you should be enjoying retirement. To avoid being part of that majority, use a trick learnt from behavioural science: Before you get your annual salary increase at work, commit the whole amount to your retirement fund over the next year.

If you want your money to grow faster than inflation, you should be thinking about investments with a term of at least 5 years

It won’t feel like a sacrifice if you set this up in the month before your salary increase – you'll still have the same amount to spend every month as before. If you can do this every year until your monthly retirement savings do amount to 15% of your gross salary, you will then be able to keep it at that rate and find other uses for part of your annual increase.

Take action now

All it takes is the willpower to not touch a small portion of your income every month but to put it into a retirement investment instead. The best way to resist temptation is to commit to a debit order, so that your monthly payment is diverted into your chosen savings instrument before you get the chance to spend it.

Once your retirement contribution has become simply 1 of those monthly fixed costs you pay first, like rent or electricity, the nature of markets and compound interest work in your favour towards helping you achieve your retirement goals.

Long-term investment gets the best growth

It’s important to know that long-term investments usually offer the best interest rates: The longer you are prepared to tie up your money, the more it will grow. That’s why savings accounts that give you instant access to your cash earn comparatively low interest. Even a 32-day notice account offers rates that will help your money keep pace with inflation – but in 10 years’ time it will still buy as much as it could today, not a whole lot more.

If you want your money to grow faster than inflation, so that its purchasing power increases over time, you should be thinking about investments with a term of at least five years. Take fixed deposits: If you keep a fixed-deposit account over 5 years, the interest rate can be more than 2% higher than for over one year. But even with a 5-year fixed-deposit account, you’re saving for medium-term life goals, not your retirement.

Obviously, you should be keeping up with savings meant for your retirement until you retire. Investments like unit trusts are more suitable long-term investments in a retirement portfolio – if you cash them out in short term, you run the risk of wildly fluctuating returns and might cash out less money than you have put in. Over the long term, though, a unit trust investment performs much more consistently, and can show average annual returns of around 10%*.

When you’re ready to commit to long-term investments, you’ll need to learn more about managing your finances. We have an excellent online resource that explains the basics in a simple and understandable way so that you can start figuring out what more you need to know.

When you're comfortable with the basics, it pays to speak to financial professionals who can guide you further along your journey to create a retirement portfolio. Getting your questions answered by one of our call centre or branch consultants could help, or you can seek out a certified financial planner that can take you to the next level.

This is certain, though: If you get yourself ready for that step before you hit 30, you’ll be able to contemplate long-term investment for your retirement seriously.

*This is based on the median return since 1900 for a high-equity portfolio.