Starting to invest early can significantly impact your retirement savings over time due to the power of compounding interest. Waiting even one year to start contributing $200 per month to a retirement plan at an 8% rate of return can result in having $55,808 less at retirement age 65 if starting at age 25 compared to age 26. Similarly, waiting from age 35 to 36 to start contributing the same amount can reduce the retirement balance by over $25,000. The longer you wait to start investing and taking advantage of compounding returns, the more difficult it will be to achieve your retirement goals.
1. Why start investing now?
Plan on waiting until you have a few more gray hairs before you start saving for
retirement? You might be surprised at the cost of waiting—and that the longer
you wait the more you may lose.
Waiting even one year to start contributing $200 a month to a retirement plan can cost you
a lot of money over the long run. Here’s what happens using a hypothetical 8 percent rate of
return on those $200 contributions. Keep in mind that this isn’t indicative of any particular
investment performance and is not guaranteed.
Age when you start Monthly Retirement plan Cost of waiting
contribution balance at 65 one year
25 $200 $698,201
$55,808
26 $200 $642,393
35 $200 $298,071
$25,142
36 $200 $272,929
45 $200 $117,804
$11,327
46 $200 $106,477
Even small contributions can add up, thanks to what’s been called the “eighth wonder of the
world” — compounding.
With compounding you earn interest on the interest you’ve already earned. Your money
grows slowly at first, but as time goes on it grows faster. That means the earlier you start
investing, the more time compounding has to work for you.
Here’s an example comparing investing $200 a month starting at age 25 to starting at age 35.
Waiting 10 years could cost you more than $400,000.
Investing $200 a month at different stages of life
Start at Age 25 $698,201
Start at Age 35 $298,071
Amount
Invested
Start at Age 45 $117,804
Total Value at
Age 65
Start at Age 55 $36,589
Hypothetical results are for illustrative purposes only and are not intended to represents past performance
or predict future performance of any specific investments.
Compounding is one more reason you can’t afford to wait. Every year you put off investing
makes your ultimate retirement goals harder to achieve.
RP-5002 6/09
2. Symetra Life Insurance Company
777 108th Avenue NE, Suite 1200
Bellevue, WA 98004
www.symetra.com
Symetra® and the Symetra Financial logo are registered
service marks of Symetra Life Insurance Company.
