What Is the Cost of Waiting to Save?

Do you think that you’re too young to start saving for retirement or for a career change? There are a lot of excuses for pushing your retirement savings off the priority list–Costofwaitingtosave “I’m too young to worry about retirement,” is a common excuse.

You may even think, “Why bother? I’ll never be able to retire.” Well, if you don’t put a retirement savings plan in place, you’re probably right.

Time is on your side, when it comes to saving for retirement

When you’re saving money, compound interest and time are what make your money grow, and of the two, time is the only factor you have at least some control over. Stop making excuses because when it comes to saving, time really does equal money.

The cost of waiting to save

It’s easy to tell yourself that waiting a few years before you start saving won’t make that much of a difference. But are you so sure about that? Do you know the cost of waiting?

Let’s look at a hypothetical* situation. If you wanted to save $500,000 for retirement by the time you’re 65, what would be the cost of waiting?

If you start saving at age 25, you’ll need to save $3,699 a year to meet your retirement savings goal.

If you wait until you’re age 30, you’ll need to save $4,993 a year to meet your goal.

That means that by waiting 5 year(s) to begin saving annually for your $500,000 goal, it will cost you an additional $26,807.

See what your time is worth – click here for a Cost of Waiting calculator.


*Hypothetical example for illustrative purposes only-not representative of any particular investment. Assumes before-tax return of 7% and a marginal tax bracket of 28%.