How much does waiting to start investing cost?

The same $500 a month from three starting ages

Here's what $500 a month becomes by age 65 at a 7% yearly return, compounded monthly, depending on when it starts. The share labeled growth is the part the market added on top of the money put in.

• Start at 25: about $1,312,000, and 82% of it is growth.
• Start at 35: about $610,000, and 70% of it is growth.
• Start at 45: about $260,000, and 54% of it is growth.

What catching up costs

Reaching the same $1.31 million finish line costs more every year you wait. Monthly amount needed to get there by 65:

• Start at 25: $500 a month, over forty years of investing.
• Start at 35: $1,076 a month, more than double.
• Start at 45: $2,519 a month, about five times as much.

How time affects the final balance

You control how long your money stays invested. The longer it stays in, the bigger the share of the final balance that comes from growth instead of from contributions.

That's why the 25-year-old in this example ends up with 82% of the balance from growth, while the 45-year-old ends up with 54%.

If you're starting later

None of this is meant to cause regret. Whatever your age, starting now gives your money more time to compound than starting later.

You don't need a large amount to begin. Starting with a small amount now does more than waiting until you can invest a larger one.

About these numbers

These are hypothetical illustrations of compound growth. They assume a constant 7% nominal annual return compounded monthly, with contributions made at the end of each month. They don't represent the performance of any actual investment or portfolio and don't reflect taxes, fees, inflation, or market fluctuation, all of which would reduce results. Actual returns vary from year to year and may be negative.