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Cost of delay

Waiting a few years to start a SIP feels harmless. Here is what it costs by the same end date.

Starting 5 years late costs you $391K

That’s 46% of what you’d have had. You end with $460K instead of $851K, though you only invested $30K less. To catch up, you’d need $925 a month instead of $500.

Shown in future amounts. Turn on Today’s money to adjust for 6% inflation.

$
yrs
Counted from today, whenever you start.
yrs
%
%
%

Same SIP, same end date

$500 a month, until 25 years from now.

What you end with
Start in 5 years$460K
Start now$851K

The years you skip are the first ones, which compound the longest. That’s why 5 lost years cost 46% of the result.

What each year of waiting costs

Future amounts

Each extra year of delay takes a bigger bite at first, because it removes the longest-compounding years.

Years of delay
Show the numbers as a table
What each year of waiting costs: data
Delay (years)You end with
0$851,103
1$754,214
2$667,706
3$590,467
4$521,503
5$459,929
6$404,951
7$355,864
8$312,037
9$272,905
10$237,966
How this is calculated

Both SIPs end on the same date, 25 years from now. The late one runs for 20 years instead of 25.

cost = SIP value over 25 yrs − SIP value over 20 yrs
catch-up = $851K ÷ value of a 1-a-month SIP over 20 yrs

Each SIP invests at the start of the month and grows at the monthly version of a 12% yearly return. Returns are assumed steady; tax isn’t modelled.