This story is part of CNBC Make It's One-Minute Money Hacks series, which provides easy, straightforward tips and tricks to help you understand your finances and take control of your money.
Saving for retirement can be overwhelming. Experts recommend striving for huge goals, like consistently saving 15% of your take-home pay and managing to put away a total of 10 times your ultimate salary by 65.
But if you aren't able to dedicate 15% of your earnings to retirement savings right now, that's OK. The important thing is to start saving what you can, as soon as you can.
Starting early is key because it allows you take advantage of compound interest, which is when you earn interest on both the principal amount and any accumulated interest.
Get a weekly recap of the latest San Francisco Bay Area housing news. Sign up for NBC Bay Area’s Housing Deconstructed newsletter.
If you invest $100 and earn 5% in interest, you'll have $105 at the end of the year. With simple interest, you'd continue to earn 5% of that $100 every year.
But with compound interest, you earn money based on the total amount in your account, not just your contribution. That means you'll now earn 5% of $105 and so on.
Let's see how that plays out with your retirement savings. Say you earn $50,000 a year. If you contribute 5% of your pre-tax salary per year and earn a 6% rate of return, which is about the market average, you'll have almost $15,000 saved up after 5 years.
After 10 years, that $15,000 will grow to around $34,000, and after 20 years, you'll have nearly $97,000 put away.
If you want to work toward putting away the recommended 15% of your income, one trick is to increase your contribution every year by such a small amount that you never even feel it.
Let's say you increase your contributions to 6% of your salary — just 1% more. After 5 years, you'd have more than $17,000 saved, a $2,000 difference. After 10 years, you'd have around $41,000 put away and after 20, you'd have nearly $116,000 saved.
If you continue to increase your contributions by 1% at a time, you'll gradually build up to the recommended 15%. Most providers allow you to set your contributions to auto-increase, so they'll automatically go up each year. You can also choose to manually increase your contributions every time you earn a raise.
And you may not have to contribute the entire 15% yourself. Many employers offer a dollar-for-dollar match on your 401(k) contributions up to a certain limit.
Check out: Meet the middle-aged millennial: Homeowner, debt-burdened and turning 40
Don't miss: This 33-year-old entrepreneur earns $226,000 in San Francisco—here's how she spends her money