Comparison
Delaying a Lump Sum: What It Can Change
A delay reduces the time a lump sum compounds under the same assumptions. Here are illustrative examples and a calculator link to compare start-now vs start-later.
Published: December 22, 2025 · Updated: December 22, 2025 · By FinToolSuite Editorial
Test your timing
Compare start-now vs start-later with your lump sum.
Disclaimer
Educational purposes only; not financial advice. Examples are illustrative; real returns vary and investments can go down as well as up. Fees, taxes, inflation, and provider rules vary by country and account type. Nothing here is a recommendation to buy, sell, or hold any investment.
Quick answer
Cost of delay ≈ start-now outcome − start-later outcome (estimated). Bigger amounts, longer delays, and higher assumptions usually create bigger gaps.
See compounding examplesWhy lump sums are sensitive to timing
A lump sum compounds on the full balance from day one in the model. Waiting removes some of that compounding time. Results depend on the rate, horizon, and fees/taxes/inflation assumptions.
Example 1: £5,000, 5%, 1-year delay
Start now
Horizon: 15 years
Estimated end value: ~£10,400
Start after 12 months
Horizon: 15 years
Estimated end value: ~£9,900
Estimated cost of delay
~£500 difference
Try this example in the calculator.
Example 2: £20,000, 3%, 2-year delay
Start now
Horizon: 20 years
Estimated end value: ~£36,200
Start after 2 years
Horizon: 20 years
Estimated end value: ~£34,000
Estimated cost of delay
~£2,200 difference
Try this example in the calculator.
Reasons people consider waiting
- Building or keeping an emergency fund.
- Uncertain cash needs in the near term.
- Wanting to understand risk and product terms.
- Administrative or setup timing.
How to test your numbers
- Enter your lump sum.
- Pick a delay window (e.g., 6, 12, or 24 months).
- Keep the horizon and rate the same for both scenarios.
- Save “Start now” and “Start later.”
- Compare them side-by-side.
Open the tool: Cost of Delay Calculator · See more cases: cost of delay examples.
Common mistakes
- Treating the assumed return as guaranteed.
- Entering 5 instead of 0.05 for the rate.
- Mixing months and years for the delay.
- Changing multiple inputs at once when comparing.
FAQ
What is the cost of delaying a lump sum?
The estimated difference between starting now and starting later with the same assumptions.
How much does a 1-year delay matter?
It depends on the rate, horizon, and amount. Run both cases in the calculator to see the gap.
What return assumption should I use?
Use illustrative rates and compare low/base/high. Avoid treating any rate as certain.
Does compounding frequency matter?
It can change projections slightly. Keep frequency the same across scenarios for fairness.
Do fees, taxes, or inflation change the result?
Yes. They can reduce net outcomes. Consider testing a lower “net” assumption if relevant.
Is it ever reasonable to wait?
People sometimes wait for liquidity needs, emergencies, or to understand risk. The calculator can show the timing trade-off without giving advice.
Are results guaranteed?
No. They’re estimates based on your inputs; real outcomes vary.
How can I compare lump sum vs monthly investing?
See invest now vs later and compound interest examples for more context.
Final CTA
Run three scenarios: start now, start in 6 months, and start in 12 months. Compare the estimated cost of delay side-by-side.