Cost of Delaying a SIP
Most of what waiting costs is not the money you did not invest.
- Instalments you never made
- ₹6.00L
- Compounding those instalments would have earned
- ₹83.85L
- Total cost of waiting
- ₹89.85L
- To catch up, you would need to invest
- ₹18.99K/month
- Starting now
- Starting later
Most of what a delay costs is not the instalments you skipped — it is the compounding those particular instalments would have earned, because the earliest ones have the longest to grow. In the default case above, the missed contributions are a small fraction of the total loss. The catch-up figure is the monthly amount that reaches the same corpus over the shorter period, and it rises steeply with the delay: waiting five years on a twenty-five-year plan typically means investing well over half as much again every month to end up in the same place. Returns are assumed constant, which real markets are not — the point of the comparison is the shape of the gap, not the precise figure.
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How it works
Waiting a few years to start investing costs far more than the instalments you skip, and the gap is not intuitive. The earliest contributions are the ones with the longest to compound, so removing them removes the most valuable years of growth rather than an average slice of it.
This calculator separates the two parts of the loss: the money you simply never invested, and the compounding those particular instalments would have earned. On a long horizon the second is usually several times the first, which is the number worth seeing.
It also shows the catch-up figure — the monthly amount a late starter needs to reach the same corpus over the shorter period. That rises steeply with the delay, and is often the more persuasive way to look at it.
Cost = future value of the full period - future value of the shorter period, at the same monthly amount and rate. Catch-up SIP = target corpus / the future value of ₹1 a month over the remaining period.Returns are assumed constant, which real markets are not. The point of the comparison is the shape of the gap rather than the precise rupee figure, and that shape is robust to the rate you assume.
Frequently asked questions
Why does a five-year delay cost so much more than five years of instalments?
Because the instalments you lose are the earliest ones, and those have the longest to compound. Money invested in year one of a twenty-five-year plan grows for twenty-five years; money invested in year twenty grows for five. Removing the first five years removes the contributions with the most growth ahead of them, not an average five years' worth.
Is it better to start small now or wait until I can invest more?
Start now, almost always. A smaller amount invested earlier usually beats a larger amount invested later over a long horizon, because time in the market does more work than the size of the instalment. You can raise the amount later — a step-up SIP formalises exactly that — but you cannot recover the compounding of years that have passed.
Does this account for market timing?
No, and deliberately so. It assumes a constant annual return, so it cannot tell you whether the years you skipped would have been good or bad ones. What it shows is the structural cost of starting later, which holds across most sequences of returns. Someone who delayed through a prolonged drawdown would have done better than this suggests; someone who delayed through a bull run, considerably worse.