The cost of putting off investing by just one year
The 7% default is a reference, not a recommendation.
The gap after 1 year of waiting
- Contributions not made
- $3,600
- Growth missed
- $16,251
The curves
- Start now — balance
- Start delayed — balance
- Money you put in
- Money it earned
Crossover
On the start-now line, growth overtakes your contributions in year 19. Your balance is $130,270, and more of it now comes from growth than from what you put in.
Five-year steps
| Year | Start now | Start delayed | ||||
|---|---|---|---|---|---|---|
| Balance | Contributed | Growth | Balance | Contributed | Growth | |
| 5 | $21,478 | $18,000 | $3,478 | $16,563 | $14,400 | $2,163 |
| 10 | $51,925 | $36,000 | $15,925 | $44,958 | $32,400 | $12,558 |
| 15 | $95,089 | $54,000 | $41,089 | $85,211 | $50,400 | $34,811 |
| 20 | $156,278 | $72,000 | $84,278 | $142,275 | $68,400 | $73,875 |
| 25 | $243,022 | $90,000 | $153,022 | $223,171 | $86,400 | $136,771 |
One year feels like nothing. You tell yourself you will start in January, or after this expense clears, or once work slows down. One year seems too small a delay to matter.
It still has a cost. Every month you wait is a month your money is not growing. Over a single year that cost looks modest. Over the decades between now and retirement, that one missed year keeps costing you, because the money that would have grown during it never gets the chance to compound in every year that follows.
This is the trap with small delays. No single year feels worth worrying about, so the delay repeats. A year becomes two. Two becomes five.
Use the tool above and set the delay to 1 year. Watch the gap. It will likely look smaller than the 5 year or 10 year examples, and that is the point. Small delays are easy to excuse precisely because their cost looks small in isolation.
Real returns are never guaranteed. They vary from year to year and can lose money. Nothing on this page is financial advice. It is simply a way to see what "just one year" actually costs, in your own numbers.