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
- 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.
Read More Perspectives & Outlooks
Browse other articles, interviews and reports you may find interesting.
Don't Miss Out.
Five strategies for getting the most from your IRA.Read More about Five strategies for getting the most from your IRA.
Generational Perspectives on Money
Boomers & Millennials Meet in the MiddleRead More about Generational Perspectives on Money
Smart Strategies for Millennials
Compared to earlier generations, millennials feel more optimistic about their financial future.Read More about Smart Strategies for Millennials
9 Retirement Tips
Ideas to help you stay on track in achieving the retirement lifestyle you want.Read More about 9 Retirement Tips
Read timely articles, including expert perspectives and market commentaries.LEARN MORE about Expert perspectives
J.P. Morgan Investment Expertise
Your J.P. Morgan Private Client Advisor taps into the expertise of J.P. Morgan to develop tailored investment strategies for you.LEARN MORE about J.P. Morgan Investment Expertise
Whether you're saving for a first or second home, paying for an education or planning for retirement, your dedicated team will work with you to help develop a plan that aligns with your goals.LEARN MORE about Your Goals
Si tiene alguna pregunta, por favor llame o visite una sucursal local de Chase.