A 35-year-old person who wants to retire at age 65 starts a yearly retirement contribution in the amount of $5,000. The retirement account is forecasted to average a 6.5% annual rate of return, yielding a total balance of $431,874.32 at retirement age.
If this person had started with the same yearly contribution at age 20, what would be the difference in the account balances?
A spreadsheet was used to calculate the correct answer. Your answer may vary slightly depending on the technology used.
$266,275.76
$215,937.16
$799,748.61
$799,874.61