Cost of Waiting to Invest Calculator

It is the difference between what your money grows to if you start now and what the same monthly contribution grows to if you start later but stop at the same age. The later start loses the contributions it never made, and it also loses the growth those early contributions would have earned for decades, which is the larger part.

Money invested at 25 has 40 years to compound before 65; money invested at 55 has 10. At 7%, a dollar invested for 40 years grows about fifteenfold, and a dollar invested for 10 years roughly doubles. So the contributions a delay removes are the ones that would have grown the most.

Yes, by contributing more each month, though the catch-up amount rises steeply with the length of the delay. With $500 a month from 25 to 65 at 7%, a five-year delay needs about $722 a month to reach the same total, and a ten-year delay needs about $1,057. The calculator above shows the figure for your own numbers.

Historically, waiting for a better entry point has cost more than it saved for most people, because the market rises in more years than it falls and a dip may not come for a long time. The delay you plan as a few months often becomes years. Investing on a fixed schedule removes the timing decision entirely.

Use a figure you are comfortable planning around. A diversified stock-heavy portfolio has historically returned roughly 7% a year after inflation over long periods, and about 10% before it. Results are in today's dollars if you use a real return. The cost of waiting grows with the return, so a higher assumption makes the delay look worse, not better.