Let's say that you want to have over $3,700,000 when you retire at age 65...
Which would you rather have to save?
$48,000 or $242,400
| age 25 | $400 each month | $5,073 | ||
| age 26 | $400 each month | $10,789.40 | ||
| age 27 | $400 each month | $17,230.80 | ||
| age 28 | $400 each month | $24,489.00 | ||
| age 29 | $400 each month | $32,677.90 | ||
| age 30 | $400 each month | $41,884.00 | ||
| age 31 | $400 each month | $52,268.90 | ||
| age 32 | $400 each month | $63,970.90 | ||
| age 33 | $400 each month | $77,157.00 | ||
| age 34 | $400 each month | $92,015.50 | ||
| age 35 | STOPPED! | $103,685.34 | $1010 each month | $12,809.33 |
| age 36 | Total invested = | $116,835.24 | $1010 each month | $27,243.20 |
| age 37 | $48,000 | $131,652.87 | $1010 each month | $43,507.65 |
| age 38 | LET IT RIDE! | $148,349.75 | $1010 each month | $61,834.83 |
| age 39 | $167,164.21 | $1010 each month | $82,486.37 | |
| age 40 | $188,364.82 | $1010 each month | $105,757.03 | |
| age 41 | $212,254.19 | $1010 each month | $131,979.00 | |
| age 42 | $239,173.33 | $1010 each month | $161,526.57 | |
| age 43 | $269,506.50 | $1010 each month | $194,821.51 | |
| age 44 | $303,686.67 | $1010 each month | $232,339.08 | |
| age 45 | $342,201.74 | $1010 each month | $274,614.81 | |
| age 46 | $385,601.49 | $1010 each month | $322,252.17 | |
| age 47 | $434,505.41 | $1010 each month | $375,931.14 | |
| age 48 | $489,611.57 | $1010 each month | $436,417.95 | |
| age 49 | $551,706.57 | $1010 each month | $504,576.00 |
| age 50 | $621,676.77 | $1010 each month | $581,378.19 | |
| age 51 | $700,520.95 | $1010 each month | $667,920.83 | |
| age 52 | $789,364.54 | $1010 each month | $765,439.24 | |
| age 53 | $889,475.72 | $1010 each month | $875,325.42 | |
| age 54 | $1,002,283.51 | $1010 each month | $999,147.92 | |
| age 55 | $1,129,398.14 | STOPPED! | $1,125,864.88 | |
| age 56 | $1,272,634.10 | Total invested = | $1,268,652.73 | |
| age 57 | $1,434,035.95 | $242,400 | $1,429,549.65 | |
| age 58 | $1,615,907.61 | $1,610,852.33 | ||
| age 59 | $1,820,845.14 | $1,815,148.73 | ||
| age 60 | $2,051,773.88 | $2,045,355.02 | ||
| age 61 | $2,311,990.16 | $2,304,757.23 | ||
| age 62 | $2,605,208.38 | $2,597,058.13 | ||
| age 63 | $2,935,614.02 | $2,926,430.11 | ||
| age 64 | $3,307,923.35 | $3,297,547.70 | ||
| age 65 | $3,727,450.83 | $3,715,789.71 |
To Sum Up:
Investment #1... We started at age 25... And invested $400 a month for just 10 years and stopped... But, we let it ride until we retired at age 65...
We invested a total of $48,000... AND ENDED UP WITH $3,727,450.83!
Investment #2... We didn't start until age 35... And invested $1010 (a lot more) a month for 20 years (twice as long) and stopped... Let it ride until age 65...
We invested a total of $242,400 (that's $194,400 more)... and ended up with a little LESS... $3,715,789.71.
The math does the talking, baby! Investment #1 is definitely the smart way to go!
So, don't put it off! Save now... play later!
(The present value of that $3,700,000 that we've projected 40 years down the road is worth just $1,000,000 in today's dollars -- assuming a 3.3% inflation factor.)