That was probably the most truthful answer that I could've given you right off the top, so I figured I'd start there.
There are a number of factors that go into the time it takes to retire. However, if you are reading this, and are in fact 25 (or somewhat close), the odds are very much in your favor that it could be much sooner than you think and take a lot less sacrifice (although greater sacrifice comes greater speed to retirement).
Given our current Social Security infrastructure in the United States, most people equate their retirement age somewhere around age 65. So for the 25 year old, that leaves the worker 40 years to accumulate enough investments through stocks, bonds and real estate to have enough annual income to live on until they pass away.
However, I tend to look at "retirement" in a different way. I think of "retirement" more as financial freedom, or basically the time at which I no longer need a job to support my lifestyle. For example, if my family's current annual living expenses is $75,000, I would reach financial freedom, regardless of age or year, at the point in which my investments are paying me an annual income of $75,000 + enough to cover the distribution taxes (i.e. dividend or fixed income tax rates).
One of the biggest drivers of years to financial freedom actually comes from how much of your annual income can you save. The chart below shows how many years it would take to reach your financial freedom threshold. In this particular chart, the average investment return is 10% or roughly the average annual return of the S&P 500 since the early 1900s.
Most people today recommend saving between 10-15% of your income annually towards retirement and this chart shows why. Saving 15% of your income, no matter how big or small your annual income is puts your years to financial freedom under 30 (meaning 55, for you recent college graduates).
The reason why increasing your savings rate becomes such a huge component of your time to financial freedom is that it is doing two things at the same time. Assume for instance, you take home $50,000 after taxes. You are putting away $7500/year, or $625/mo. This money is able to compound and grow over time. Assuming you're 25 today, that $7500 investment is likely to grow to approximately $130K by the time you reach 55, and nearly $340K if you don't need it until 65.
However, that's only half the good news. You also are allowing yourself to live comfortably on the remaining $42,500. The ability to keep your lifestyle costs down also allows you to need less money to live on once you reach that financial independence time and maybe choose to not work.
This double lever attack on your long-term saving and investment is one of the very best things you can do for your financial well-being.
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