If you wait until this age to start saving for retirement, you will miss out on years of potential earnings.

If you don't start saving for retirement by age 40, you may need to revise your long-term strategy.

According to Anne Lester, a retirement expert and author of "Your Best Financial Life," by the time you reach retirement age, simply investing more into your retirement accounts may not be sufficient to fund the lifestyle you envision for your post-work years.

At 40, she advises CNBC Make It that in order to tackle the challenge of retirement, one must consider more than just saving money. The options are to continue earning or to drastically alter one's consumption habits.

To achieve a more comfortable retirement lifestyle, you may need to make significant changes, such as reducing your travel expenses, selling your home, and relocating to a lower-cost area.

Lester states that not saving when young will limit the options available to you in the future.

The benefits of saving for retirement early

Recent data from Bankrate shows that 26% of Gen Z workers, aged 18 to 27, did not contribute to their retirement savings last year and are not currently contributing.

In your 20s, it may be challenging to save a substantial amount for retirement, but it's essential not to postpone saving indefinitely.

"Missing a year in your early 20s isn't a significant issue, but it can have long-term consequences if you miss out on early contributions to a 401(k) plan, particularly if there's a company match. This means you'll miss out on free money and won't be able to recover it."

DON'T MISS: The ultimate guide to negotiating a higher salary

By starting to save for retirement early, your money has more time to grow through compound interest, and you need to contribute less of your annual earnings compared to starting later.

If you wait until you're 40 or older to begin saving, experts generally advise setting aside 25% or higher of your annual income, including any company match, Lester says.

To achieve your goal of retiring with $1 million by 65, if you begin contributing at 25 and earn a 7% annual rate of return, you'd need to save $381 per month. However, if you start at 40, you'd need to save approximately $1,234 per month to reach the same goal.

It may not be feasible to reach the $1 million goal with a later start, as it would require significantly more money.

Lester states that waiting until age 40 to begin investing can result in missing out on approximately two decades of money's compounding.

Saving a small amount of money for retirement early on can have two benefits, according to Lester. Firstly, it allows your money more time to grow. Secondly, it helps you develop the habit of saving, making it easier to continue in the long run.

"As you build the savings muscle, it becomes less scary, less intimidating, and less frightening. You start to redefine yourself as someone who saves and invests, which sets you on a lifelong path to having choices as you age."

Earn more money at work by taking CNBC's new online course, "How to Negotiate a Higher Salary." Expert instructors will teach you the necessary skills to increase your paycheck, including preparation, confidence-building, effective communication, and counteroffer crafting. Pre-register now and use coupon code EARLYBIRD for a 50% introductory discount through Nov. 26, 2024.