Don't Delay Your Savings!
Waiting to begin your savings plan can have a huge impact on your results.
A delay of even a few years could cost you thousands of dollars. This calculator
helps show you how much postponing your savings plan can really cost.
Definitions
Starting amount
The starting balance or current amount you have invested or
saved. For this calculator, we assume your current savings is earning your
annual rate of return whether you decide to delay your new contributions or
not. For example, if you have a current balance of $1000 and never make any
new contributions, your delayed and non-delayed results will be the same.
Additional contributions
The amount that you plan on adding to your savings
or investment each period. The options include monthly, quarterly and annually.
This calculator assumes that you make your contributions at the beginning of
each period.
Years
The total number of years you are planning to save or invest.
Rate of return
The annual rate of return for this investment or savings account.
The actual rate of return is largely dependent on the type of investments you
select. From January 1970 to December 2004, the average compounded rate of
return for the S&P 500, including reinvestment of dividends, was approximately
11.5% per year. During this period, the highest 12-month return was 64%, and
the lowest was -39%. Savings accounts at a bank pay as little as 1% or less.
It is important to remember that future rates of return can't be predicted
with certainty and that investments that pay higher rates of return are subject
to higher risk and volatility. The actual rate of return on investments can
vary widely over time, especially for long-term investments. This includes
the potential loss of principal on your investment.
Years to wait
The number of years you might wait before you begin saving. We
will then delay your new contributions for that number of years.
Cost of waiting
The difference in your savings or investment balance between
your delayed and non-delayed plans.
Required contribution
If you wait to start saving, this is the amount you would
need to contribute each period to achieve the same result as starting your
savings plan immediately.
Information and interactive calculators are made available to you as self-help
tools for your independent use and are not intended to provide investment advice.
We can not and do not guarantee their applicability or accuracy in regards
to your individual circumstances. All examples are hypothetical and are for
illustrative purposes. We encourage you to seek personalized advice from qualified
professionals regarding all personal finance issues.
