The Cost of Procrastination

14 Jul 2015

Time is your number one ally—or your number one enemy.

Consider the cost of procrastination, for example. Let’s say you invest $458.33 per month. That’s a total of $5,500 a year, the amount someone under the age of 50 can currently contribute to an IRA each year. Let’s also assume a 10 percent rate of return—a bit high, given recent markets, but a common assumption not long ago. Your target retirement age is 65. If you start at age 35, you will have accumulated $952,868. If you wait until you are 37, just two years later, you will be investing only $11,000 less. Not a big deal, right? The math shows otherwise: Your total at retirement will be $777,327. That’s a difference of almost $176,000.

Now, if you divide that by the number of days in two years, the cost of procrastination is $240 per day. That’s the decision that you are making. Take advantage of time and the power of compounding!

Learn more about how important it is to plan early for retirement in my book: Stop Trying to Keep Up With the Joneses: They’re Broke Anyway.

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Brad Berger
Brad Berger

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