Why a few years can cost so much
The calculator compares two people who save the same amount each month and stop at the same age. The only difference is when they start. It projects each balance month by month. Each month, the existing balance grows by one month's share of your selected yearly return, then your monthly contribution is added. That's compounding: growth is calculated on your deposits and on the growth they've already earned.
Take the default example. Saving $300 a month from age 30 to 65 at a hypothetical 7% a year projects to about $540,316. Starting the same plan at 35 projects to about $365,991. The gap is $174,325, yet the late starter only skipped five years of deposits, or $18,000.
Where does the rest come from? Those first five years of deposits would have grown to roughly $21,478 by age 35. That money then keeps compounding for another 30 years, and at 7% a balance roughly doubles every 10 years. By 65, that early $21,478 has grown to the full $174,325 gap. In other words, the cost of waiting isn't the deposits you miss. It's the decades of growth those deposits would have had.
That's also why catching up is expensive. To reach the same balance starting at 35, you'd need about $443 a month instead of $300, because each dollar has fewer years to grow. The table under the results shows how the gap widens with each year of delay.
Keep the limits in mind. The projection assumes a steady return every year and on-time deposits, and it leaves out inflation, taxes and fees. Real markets go up and down, and returns can be negative. Use the results to compare paths, try a few return rates, and revisit your numbers as life changes. If you'd like help turning them into a plan, talk with a licensed professional.
