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What ten years of waiting actually costs.
Compounding is unfair in one specific way: the early years do most of the work, and you only get them once. This shows the size of that effect with your own numbers.
What it becomes, year by year
Balance at each age, at three assumed rates, against what you actually contributed.
- What you put in
| Age | Put in |
|---|
What waiting costs
Same monthly amount, same middle rate, same finish age — only the start date moves.
Why the early years matter so much
Every dollar you save has a job: earn a return, and then have that return earn a return. A dollar saved at 25 has forty years to do the second part. A dollar saved at 45 has twenty. That is the entire mechanism, and it is why the first ten years of saving usually matter more than the ten years before retirement, when most people finally get serious.
Which is also the honest reason this page exists. Nobody can promise you a rate. What can be said with confidence is that the start date is worth more than the rate at most realistic assumptions — and the start date is the one you control.
What this deliberately does not do
- It is not a projection. The rates are assumptions you typed in. Real returns are not a smooth line; they arrive as a jagged sequence, and the order matters more than most people expect as you approach the end.
- It ignores fees and tax. Both are real. A 6% return with 2% of fees is a 4% return. Whether the account is a TFSA, an RRSP or a taxable account changes what you keep.
- It ignores inflation. The figures are in today's dollars going in and future dollars coming out. Subtract two to three per cent a year to think in real terms.
- It is not advice, and it is not a product. No product on this site pays a rate you choose on a form. See what I can and cannot help with.
Where I fit
I am licensed for insurance, which inside a registered account means segregated funds and annuities. I cannot sell you an index fund and I do not manage portfolios. What I can do is make sure the account is the right one, the beneficiary designation is right, and the money that would keep arriving for your family if you were not here is actually insured.
The rate is the part you cannot control.
The start date, the amount, and whether the money is sheltered from tax — those you can. That is most of a twenty-minute conversation.