Compound interest is one of the most powerful tools for long-term savers. It refers to the process where your investment earnings themselves start to earn returns. Over time, this exponential growth can significantly outpace simple interest. In the context of retirement, even modest contributions can grow into substantial savings if invested consistently over decades. This is why many financial experts stress the importance of starting early—even small monthly contributions can grow into six-figure retirement accounts with the help of compound returns and time.