Target, deadline, and what it costs to miss the start
Savings goal calculator
Every goal calculator will tell you the monthly number. The part that actually changes behaviour is the second number: what that figure becomes if you start in January instead of now. This one shows both, and prices them against the other two levers you have — a later deadline, or a smaller target.
The goal
Today's dollars is the right choice for a deposit, a car, or a year of fees — anything you priced at current prices. The calculator then compounds at the real rate, —, derived with the Fisher relation rather than by subtracting inflation.
Contribute each month
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Cost of starting a year late
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Contributions versus growth
The gap between the two lines is compound growth. On short horizons it barely opens — which is exactly why a near-term goal has to be funded by contributions, not by optimism about returns.
Lever 1 — start later
| Delay | Monthly |
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Lever 2 — more time
| Extra | Monthly |
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Lever 3 — smaller target
| Target | Monthly |
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Why the delay number is the one worth looking at
The monthly figure on its own is a fact you can get anywhere. It also tends to produce the wrong reaction — people look at it, decide it is too much, and put the decision down. The delay column is what reframes it, because postponing is not a neutral act. It is a choice with a price, and the price is legible.
Two things happen when you wait. You lose the contributions you did not make, which is the obvious part. You also lose every dollar of growth those contributions would have earned for the entire remaining horizon, which is the part that does the damage. The two compound together, so the penalty is not linear in the delay — and it gets sharply worse as the deadline approaches, because there is less time left to spread the shortfall over.
That produces a result worth sitting with: the shorter your horizon, the more expensive delay becomes. It is the opposite of the usual intuition, which says a long horizon is where timing matters most. For a thirty-year retirement goal, a year of delay is an irritation. For a four-year house deposit, a year of delay can raise the monthly requirement by a third, because you have removed a quarter of the contribution window and growth was never going to close the gap anyway.
Real returns, done properly
If your target is stated in today's money, you need a real return, and the real return is not the nominal return minus inflation. The correct relation is (1 + nominal) / (1 + inflation) − 1. At 7% nominal with 3% inflation that gives 3.88%, not 4%. Across 25 years on a $500 monthly contribution that is $250,339 rather than $254,424 — the naive version overstates by $4,085, or 1.6%. Small, but it always errs in the flattering direction.
This calculator also compounds monthly by taking the twelfth root of the annual figure rather than dividing by twelve. Dividing by twelve quietly overstates the return, because monthly compounding at r/12 produces more than r across a year. This error is the larger of the two: the same $500 a month at 7% for 25 years gives $405,036 under r/12 and $391,521 under the twelfth root — a gap of $13,515, or 3.5%. Both conventions are in wide use. The one here is the one that reproduces the annual return you actually typed in.
Three goals, same assumptions, very different shapes
All three rows below assume a 7% nominal return, 3% inflation, a $10,000 starting balance, and a target stated in today's money. Nothing changes except the horizon and the target. You can reproduce any row by typing it into the calculator above.
| Goal | Monthly | If you start a year late | Growth's share |
|---|---|---|---|
| $60,000 deposit in 4 years | $934 | $1,270 (+36%) | 8.6% |
| $150,000 in 10 years | $928 | $1,052 (+13%) | 19.1% |
| $1,000,000 in 25 years | $1,946 | $2,072 (+6%) | 40.6% |
Two things in that table are worth more than the monthly figures themselves.
The first is that the four-year deposit and the ten-year goal need almost identical monthly contributions — $934 against $928 — despite the ten-year target being two and a half times larger. That is compounding doing the extra work, and it is the single strongest argument for setting a goal earlier rather than setting it bigger.
The second is the delay column, which moves in the opposite direction to intuition. A year of hesitation on the twenty-five-year plan costs 6%, an annoyance you could absorb with a modest raise. The same year on the four-year deposit costs 36%, and there is no raise coming that covers it. When people say "I'll start next year," the goals where that is survivable are precisely the ones where it feels least urgent, and the goals where it is close to fatal are the ones that feel too close to bother optimising.
The growth column explains why. On a four-year horizon, growth contributes under 9% of the final balance — the money is essentially all yours, contributed by hand, and there is no mechanism that can make up a missed year. At twenty-five years growth supplies over 40%, and a year of delay removes contributions that were only ever going to be a minority of the result anyway. The lesson is not "start early" in the abstract. It is that short-horizon goals are contribution problems and long-horizon goals are time problems, and they want different responses.
Which lever to pull
The three tables above are the same equation solved for different unknowns, and the pattern in them is stable. On a long horizon, extending the deadline is almost always the cheapest lever — an extra two years on a twenty-year goal cuts the monthly requirement far more than two years of contributions would suggest, because growth absorbs the difference. On a short horizon, extending barely helps, and the honest options narrow to contributing more or wanting less.
If the number is out of reach on every lever, that is information rather than failure. It usually means the goal and the deadline were set independently of each other, and one of them has to move. Better to find that out now than at month forty of forty-eight.
What this does not model
A constant return, which real markets do not provide — a goal funded by equities can be well ahead of schedule at year six and behind at year seven. For anything with a hard deadline inside about five years, that variance is the dominant risk and a lower assumed return is the sensible hedge. It also ignores tax on the growth, contribution limits on whatever account you are using, and any employer match, all of which are specific to the account rather than the arithmetic.