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What Is the Price of Waiting?

No matter what life stage you’re in, you know that saving money takes determination and discipline. Retirement seems like a long time away, and those pesky expenses of daily living keep popping up. It takes planning and a certain amount of sacrifice to save, but the good news is that the earlier you start, the smaller the amount you need to tuck away each month.

The following chart illustrates how saving early can help you in the long run. To save $100,000 in 25 years (assuming an 8% tax-deferred return), start now and you’ll need to save $109.31 each month. If you wait five years to start saving, you’ll need $174.62 each month. If you wait 10 years to start saving, you’ll need to save $294.31 each month — that’s $185 more per month to accumulate $100,000. So you can see why we agree that time can be your greatest friend in building a secure retirement.

The column on the right shows the total amount of money you need to save over the years to arrive at $100,000. That’s based on an 8% tax-deferred return on investment.

What Is the Price of Waiting?
Begin Saving Monthly Savings Annual Savings Total Amount You Need to Save
Now $109.31 $1,311.72 $32,973
2 years from now $131.23 $1,580.64 $36,355
5 years from now $174.62 $2,095.44 $41,909
10 years from now $294.31 $3,531.72 $52,976

Hypothetical example used for illustrative purposes only. It is not indicative of any specific investment product or strategy. Investments will fluctuate with changes in market conditions so that, when redeemed, shares may be worth more or less than their original cost.

Example does not take into consideration the consequence of expenses and fees. Withdrawals on tax-deferred accounts are subject to income tax and may be subject to a penalty if taken prior to age 59½.

Finding a small amount to carve out of your budget now may be much easier than finding almost double that amount 10 years from now. Consider maxing out your 401(k) contributions and tucking any extra funds into an IRA or annuity.

Do a reality check on the state of your retirement savings by using our retirement calculators. They’ll help you plan for a secure retirement.

Western-Southern Life Assurance Company offers insurance and annuity products to help you reach your retirement goals. Contact a representative for information about our retirement savings options.

Investment decisions should be based on an individual's goals, time horizon, and risk tolerance.

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Last Updated: 1/31/2017