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Most discussions of the cost of delaying the start of a savings program focus on the differences between dollar balances between delaying and starting sooner.
However, what really is happening is the shift in time, which I illustrate below. Delaying 10 years now actually shifts what you would have had later by 10 years. Of course, those lost later 10 years may not be available for you to make them up, as explained below. So, the real cause of the shortfall is not having time at the end where the growth really occurs. It doesn’t matter what the ages are – what matters is the lost time due to delay. Even a little savings early is better than nothing so there is more time for those early savings to compound more.
And there is a risk to delay because most people can't work as long as they believe they can.
Links within file (please highlight, copy and paste into your browser):
volatility drag https://cssanalytics.wordpress.com/2012/03/12/understandingthelinkbetweenvolatilityandcompoundreturns/
stochastic https://en.wikipedia.org/wiki/Stochastic_investment_model
deterministic https://en.wikipedia.org/wiki/Deterministic_system
more than half ... EBRI Retirement Confidence Survey https://www.ebri.org/surveys/rcs/
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