You may give up thousands of future dollars for every year you delay starting a tax-deferred retirement plan. Here’s why: Every year that you wait you are paying more in income taxes. And, every dollar lost to taxes is a dollar that cannot be used to help increase your future financial security.

More importantly, every year that you postpone establishing a plan represents a lost annual contribution—and every year of delay costs you a year’s worth of tax-deferred growth. The combination of lost contributions and lost tax-deferred earnings can be enormous.

A Case in Point Suppose the following facts are true:

Your present age: 43
Assumed annual contribution: $15,000
Annual return: 9%
Your retirement age: 65
Number of years for payout: 20
Years you delay your plan: 2



Results With a Delay Without a Delay The Cost of Delay
Total Plan Contributions: $300,000 $330,000 $30,000
Earnings on Plan Assets: $536,468 $697,979 $161,511
Accumulation in 22 Yrs.: $836,468 $1,027,979 $191,511
Annual Retirement Income: $91,632 $112,611 $20,979
Total 20-Year Payout: $1,832,642 $2,252,230 $419,587


This is a hypothetical example for illustrative purposes only and does not represent the return of any specific product


K. Orian Williams, J.D.

Financial Services Professional

Fleur de Lis Financial an agency of MassMutual


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