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
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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 assumed rate of return for this investment or
savings account. The actual rate of return is largely dependant on the type
of investments you select. For example, 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 currently 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. |