Magic of Starting Early
Compound growth means your money earns returns, and then those returns earn more returns. The longer you wait to start, the more of that cycle you miss. Even small amounts, started early, can snowball over decades.
Set aside the monthly amount you entered, starting this month. Open a registered savings account or investment account if you have not already. Automate the contribution so it happens without thinking.
Come back to this tool each year. Increase your monthly amount when your income rises. Update your retirement age if your plans change. Small adjustments each year add up over time.
Use the free Know-Do-Review Checklist to track your progress.
- Compound Growth
- When the returns on your savings or investments earn their own returns over time. The longer your money has to compound, the larger the effect. Time is the most powerful ingredient.
- Cost of Waiting
- The difference in total growth between starting today and starting later. Because compound growth is exponential, waiting even a few years can reduce your ending balance significantly.
- Rate of Return
- The percentage your savings or investments grow each year, expressed annually. This tool uses 6% as an illustrative figure only. Your actual rate of return will depend on your account type and choices.
- Retirement Age
- The age at which you plan to stop working and begin drawing on your savings. Your target retirement age affects how many years your contributions have to grow.
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