Definition
What Is Cost of Delay?
Cost of delay is the value you may give up by waiting to start, often described as opportunity cost. It compares a “start now” path to a “start later” path under the same assumptions.
Published: December 22, 2025 · Updated: December 22, 2025 · By FinToolSuite Editorial
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Quick answer
Cost of delay is the estimated difference between a start-now outcome and a start-later outcome with the same assumptions. In shorthand: cost ≈ start now − start later. It depends on your rate and time inputs.
Cost of delay vs opportunity cost
Opportunity cost is what you give up when you choose one option over another. For savings or investing, it can be the growth missed by starting later under the same conditions. Time and compounding are the key drivers.
Why time matters
The earlier money starts compounding, the longer it has to grow under the same assumptions. Delays shorten that window and can reduce the projected value of the “start later” path. This applies to interest on savings and potential returns on investments (with variability).
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.
Two quick examples
Example A: Lump sum, 1-year delay
£5,000 at 5% (illustrative), 15-year horizon, start later by 1 year. The later start has less time, so the estimated ending value is lower. Try it in the calculator.
Example B: Short delay, smaller amount
£1,000 at 5% (illustrative), 10-year horizon, delay 6 months. The gap is smaller than a longer delay but still reduces the projected total. Try it in the calculator.
When cost of delay is biggest
- Longer delays.
- Higher assumed rates.
- Larger amounts.
- Longer horizons.
- Fees, taxes, and inflation can change net outcomes.
Next steps
Compare “start now” vs “start later” with the same assumptions. Try the calculator and dive deeper with the guide, formula, and examples.
FAQ
What does “cost of delay” mean?
It’s the estimated difference between starting now and starting later with the same assumptions.
Is cost of delay the same as opportunity cost?
Yes, it’s a type of opportunity cost focused on timing.
How does the calculator estimate the cost?
It models “start now” and “start later” with the same rate, amount, and horizon, then shows the difference.
What return assumption should I use?
Use illustrative ranges and compare. See the Cost of Delay guide.
Does a 6-month delay matter?
It shortens compounding time. The impact depends on rate, horizon, and amount—run both cases to see the gap.
Why do results change a lot with the rate?
Higher rates increase growth potential, so the difference between start-now and start-later widens as the rate rises.
Do fees, taxes, and inflation matter?
Yes. They can lower net outcomes. Adjust assumptions if you want to see different net projections.
Are results guaranteed?
No. They are estimates based on your inputs; real outcomes vary.
Can I compare multiple delays side-by-side?
Yes. Save scenarios (e.g., 0, 6, 12 months) and compare.
What if I’m contributing monthly instead of a lump sum?
You can still compare timing by keeping the monthly amount the same and changing only the start date in the calculator.
Final CTA
Run 2–3 scenarios: start now, start in 6 months, and start in 12 months. Compare the estimated cost of delay side-by-side.