The retirement calendar: Early for time, late for caution

Léa and Tom are preparing for retirement. Same investment, same amount every year. One difference: when.

For the example, say a return of seven per cent a year. And two thousand euros paid in each year.

Léa starts at twenty-five. She pays in for ten years, then stops dead at thirty-five. Twenty thousand euros paid in.

Tom starts at thirty-five, and pays in until sixty-five. Thirty years. Sixty thousand euros paid in.

At sixty-five, Tom has two hundred and two thousand euros. Not bad.

Léa has two hundred and twenty-five thousand. Three times less paid in, and more at the end.

Her first decade had thirty years to grow. It is the decade worth all the others.

Starting early does not take much money. It mostly takes time, and that is the one thing you cannot catch up on.

But the story has a second half. As retirement nears, time stops being an ally.

In the app, this chapter is animated and narrated, card by card. Start free trial.

At twenty-five, a thirty per cent fall on three thousand euros is nine hundred euros. And forty years to recover.

At fifty-five, the same fall on three hundred thousand euros all in shares: ninety thousand euros gone.

And no more time to rebuild. The last decade is when risk becomes dangerous.

Hence the idea of the shift. You gradually move savings from risky to safe as retirement approaches.

With only forty per cent in shares, the same fall costs thirty-six thousand euros. Not ninety.

The key word is gradually. Selling everything at once is betting on the day of the sale.

In France, it is even the default mode of retirement savings plans: managed allocation, which does the shift for you.

That leaves what cannot be planned: career gaps. Unemployment, part-time work, years abroad.

Three years without paying in at thirty, in our example, means almost sixty thousand euros less at sixty-five.

And for the state pension, some periods count, others do not. The rules vary by country and situation.

The useful reflex: check your career statement early, and make sure nothing is missing. An error is easier to fix at forty than at sixty.

The calendar fits in two sentences. At the start, time works for you: get going.

At the end, it can no longer repair: protect. And in between, move from one to the other smoothly.