TL;DR: Starting retirement savings during grad school, even in small amounts, benefits disproportionately from compounding over the extra 5–7 years of head start compared to starting after graduation. The main complication is that pure fellowship income (as opposed to wage income from an assistantship) historically didn't count as "earned income" for IRA contribution eligibility — a rule that changed with the SECURE Act of 2019, but is worth confirming your specific situation against, since the details matter.
The case for starting small, now, rather than "later"
A dollar invested at age 24 has meaningfully more time to compound than the same dollar invested at age 30 or 32 — the difference from those few extra years, compounded over a full career, is often larger than most people intuit. This doesn't mean grad students should sacrifice food or emergency savings to max out retirement accounts — it means even a small, consistent contribution during grad school is disproportionately valuable compared to the same amount contributed later.
The IRA eligibility wrinkle for fellowship income
For years, IRS rules only counted taxable compensation — generally wage income like a TA/RA paycheck — as eligible for IRA contributions, which excluded students funded purely through fellowships or training grants with no W-2 wage income, even though that income is taxable. The SECURE Act of 2019 changed this starting with the 2020 tax year, so that taxable non-tuition fellowship and stipend payments can count as compensation for IRA contribution purposes.
This is a meaningful change specifically for fellowship-funded PhD students, who previously had no straightforward legal path to IRA contributions despite paying tax on that income. If your funding is fellowship-based, confirm this rule applies to your specific tax year and situation — this is exactly the kind of detail worth checking with a tax professional or the current IRS guidance rather than relying on general information, since some retirement account rules apply differently across different fellowship structures.
Roth vs. traditional IRA, roughly, for a grad stipend income level
At typical grad stipend income levels, many students are in a lower tax bracket than they expect to be in later in their career. A Roth IRA (contributions made with after-tax dollars, withdrawals tax-free in retirement) is often more advantageous at a low current income level than a traditional IRA (which defers tax now but taxes withdrawals later, when your bracket may be higher) — though this depends on individual circumstances and is worth verifying against your own numbers rather than assuming.
A realistic amount to start with
There's no minimum contribution to feel embarrassed about. Starting with even $25–50 a month, automated the same way an emergency fund transfer would be, builds the habit and captures the time-value benefit — the specific dollar amount matters far less at this stage than simply starting consistently.
What comes first
If you don't yet have a small emergency fund (see Building an Emergency Fund on a Grad Stipend), it generally makes sense to prioritize that first — retirement accounts have penalties or complications for early withdrawal, while an emergency fund is meant to be accessed quickly and without cost. Retirement savings works best as a "yes, but after the basics are covered" priority, not an either/or against covering an actual emergency.