Waiting to begin your savings plan can have a huge impact on your results. A delay of even a
few years could cost you thousands of dollars. This calculator helps show you how much
postponing your savings plan can really cost. Click View Report to see a detailed
summary.
Definitions
Starting amount
The starting balance or current amount you have invested or saved. For this
calculator, we assume your current savings is earning your annual rate of
return whether you decide to delay your new contributions or not. For example,
if you have a current balance of $1,000 and never make any new contributions,
your delayed and non-delayed results will be the same.
Additional contributions
The amount that you plan on adding to your savings or investment each
period. The options include monthly, quarterly, and annually. This calculator
assumes that you make your contributions at the beginning of each period.
Years
The total number of years you are planning to save or invest.
Rate of return
The annual rate of return for this investment or savings account. The
actual rate of return is largely dependent on the type of investments you
select. From January 1970 to December 2006, the average compounded rate of
return for the S&P 500, including reinvestment of dividends, was
approximately 11.5 percent per year (source: www.standardandpoors.com).
During this period, the highest 12-month return was 61 percent, and the
lowest was -39 percent. Savings accounts at a bank pay as little as 1
percent or less.
It is important to remember that future rates of return can't be
predicted with certainty and that investments that pay higher rates of
return are subject to higher risk and volatility. The actual rate of return
on investments can vary widely over time, especially for long-term
investments. This includes the potential loss of principal on your
investment. It is not possible to invest directly in an index, and the
compounded rate of return noted above does not reflect additional sales
charges and fees that funds may charge.
Years to wait
The number of years you might wait before you begin saving. We will then
delay your new contributions for that number of years.
Cost of waiting
The difference in your savings or investment balance between your delayed
and non-delayed plans.
Required contribution
If you wait to start saving, this is the amount you would need to
contribute each period to achieve the same result as starting your savings plan
immediately.
Information and interactive calculators are made available to you as
self-help tools for your independent use and are not intended to provide investment advice. We
can not and do not guarantee their applicability or accuracy in regards to your individual
circumstances. All examples are hypothetical and are for illustrative purposes. We encourage
you to seek personalized advice from qualified professionals regarding all personal finance
issues.
Note: The above information is not intended or written to be used as
legal or tax advice. It was written solely to support the sale of annuity products. As a
taxpayer, you cannot use it for the purposes of avoiding penalties that may be imposed under
the tax laws. You should seek advice on legal or tax questions based on your particular
circumstances from an independent attorney or tax advisor.
