Why the first years count most
Money invested early has the longest time to compound, so it ends up doing far more work than money added later. Delaying by a few years removes those early contributions and, more importantly, the decades of growth they would have earned at the end.
Investing $400 a month from 25 to 65 at 7% grows to about $1,050,000. Starting at 35 instead, the same $400 a month reaches only about $490,000, less than half, even though you put in only $48,000 less. To catch up from 35, you would need to invest about $860 a month.
What to do if you started late
Starting late is common, and the answer is the same: start now with what you can, raise the amount as income grows and use catch-up contributions to retirement accounts after 50. Every year you wait from today makes catching up more expensive, so the best time to begin is always the next payday.
Common questions
How much does waiting 10 years to invest cost?
At 7%, investing $400 a month from 25 instead of 35 leaves you more than $550,000 better off by 65.
Is it too late to start investing at 40?
No. You will need to save more each month, but 25 years is still plenty of time for compounding to matter.
Does this include inflation?
No. Use a lower return, around 4 to 5%, to see results in today's money.
This calculator gives estimates for planning. Real returns, rates and prices change, so treat the result as a guide rather than a promise. Read how we build and check our calculators.