Start Now: Time Value of Money
Why should I worry about saving now? I have time to think about that stuff later.
I bet you have heard that type of statement before, but does waiting until later to save really cost you? Alicia thought that there may be benefits to starting early, but her twin brother Alex did not.
Who do you think is right? Who will have more?
Alicia
- Start saving age 20
- Amount: $1200 / year
- Investment: Roth IRA.
- How long: Age 20-45 (25 years)
- After age 45, no more contributions,
will just let it sit earning interest until she is 55. - Total Contributions: $30,000
Alex
- Start saving: age 30
- Amount: $1200/year
- Investment Roth IRA
- How long: Age 30-55 (25 years)
- Total contributions: $30,000
Use this calculator to check »
Assume they have the same tax rates and that they both earn 9.5%. who has more?
Start Now | Alex and Alicia continued »