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Start Early, Save Less:
The Power of Compounding

Start early to pursue the benefits of compounding

Let’s say you want $1 million for retirement by age 65. Assuming a hypothetical investment earning 6% annual returns, how much would you need to save each day to get there? It depends, in large part, on when you start investing. The sooner you begin, the more time your money has to potentially compound and grow in value—and the less you may have to invest (see chart).Footnote 1

Start Early, Save Less: Daily investments needed to reach $1 million at
age 65Footnote 1

What is compounding?
The snowball effect that happens each time you make money on not only your original investment, but on past returns too.Footnote 1

Starting Age - 25 years ($17), 35 years ($34), 45 years ($72), 55 years ($202)


  • Time is your friend. The longer you invest, the greater your growth potential.
  • Think long term. Thanks to rising life spans, even retirees may still have decades for compounding.
  • Returns matter. Savings accounts and CDs compound too, but at slower rates due to lower returns.
  • Ride out the bumps. Risks tend to decline over time; avoid taking on more than is comfortable.


  • Start now to maximize your investment time horizon.
  • Invest regularly and stick with your plan; compounding only works if you stay invested.
  • Reinvest what you make, so those returns may earn their own returns.
  • Defer taxes to keep more money compounding in your accounts.

Talk to a J.P. Morgan Financial Advisor:

Together, you can create a long-term plan and well-diversified portfolio that puts compounding to work for you.

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