People often think that delaying starting a regular investment plan by a couple of years won’t matter that much and assume that they can ‘catch-up’ by investing a higher monthly amount later in life. However the effect of delaying can be greater than you think.
It is all too easy to put off planning early especially if you are starting off your working life or you have no particular financial goal in mind. It’s human nature.
However, when you look at the example below, you’ll see how big an impact a short delay could have on the amount you might have later in life. You might be surprised to see that a delay of as little as even five years could reduce your pot by almost 1/3.
If you start investing US$1,000 every month into an investment plan and continue for 25 years, your pot at the end could be worth almost US$598,000*.
However, if you wait five years and start the same investment plan with the same US$1,000 each month, the amount you would end up with 20 years later might only be around US$412,000*. Put simply your pot will only be around 2/3 of what it would have been if you had started five years earlier.
Pot values quoted assume an annual growth rate of 5% over the periods indicated. These figures are indicative only and not based on an actual investment. There is no guarantee of the annual growth rate. You will be subject to investment and market risks.
So remember, the longer you delay, the lower the final amount you may end up with.
It may be stating the obvious, but when it comes to long-term investing, the sooner you start, the greater the opportunity to build up a bigger pot for your future.
What might not be so obvious is just how big that effect can be.
Investing in an investment-linked assurance scheme may be one of the options for you to reach your financial goal.
Ask your financial adviser for other examples of the impact of delaying starting your plans or for our ‘Your guide to regular investing’ brochure.
Now’s the time to start planning. Now’s the time to talk to Standard Life. Ask your financial adviser for details.
It’s easy to put off starting planning. But remember, the sooner you start, the greater the lump sum you could end up with.
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Disclaimer: The above information is for reference only and should not be construed as legal, tax or investment advice. You should seek professional advice regarding your tax circumstances and the types of investment that are suitable for you. Investing in investment-linked assurance scheme involves investment risks. Past performance is not indicative of future performance.