How to Save $1 million (by Age)! (Article)
How to Save $1 million (by Age)!
The beginning of a new year causes many of us to consider goals and dreams for the months ahead. Perhaps a goal you have is saving more for retirement. While this is a good goal, it can be easy to lose motivation and focus if the dream is not specific. Instead of vague goals, be detailed regarding the amount you hope to save.
What if your goal was stated like this: “When I retire, I want to have $1 million.”
So, you want $1 million for future you in retirement, but how do you get there? One of the largest components in saving for retirement is TIME. The more time you have, the more compound interest works in your favor. If you have the goal to amass 7 figures by time you retire, consider the scenarios below to see how much you’ll need to save:
(All scenarios assume a 7% interest rate, compounded monthly. Assumed retirement age 65.)
- Age 20: $264/month ($8.80/day)
- Age 25: $381/month ($12.70/day)
- Age 30: $556/month ($18.53/day)
- Age 35: $820/month ($27.33/day)
- Age 40: $1,235/month ($41.16/day)
- Age 45: $1,920/month ($64/day)
- Age 50: $3,155/month ($105.16/day)
When looking at these scenarios, consider the vast difference in what savings rate is required. A 25 year old many think $381/month is not attainable to save every month. But when broken down to a daily number, you realize that $12.70/day is much more manageable. Small steps you take now can have a big difference in what is waiting for you in retirement.
Do you know how much you need to retire? The sales-free Money Advisors at Francis Investment Counsel can help you figure out what you number is and steps to take to get there. Click here to schedule your session.
You’re Just Getting Started
MoneyAdvice@Work® is an employer-sponsored financial wellness benefit designed to connect employees to financial professionals who educate, advise, and coach without the sales pitch. Learn more about our service offering here. The summary/prices/quotes/statistics contained herein have been obtained from sources believed reliable but are not necessarily complete and cannot be guaranteed. Past performance results are not necessarily indicative of future results. MoneyAdvice@Work® is offered through Francis Investment Counsel, a Registered Investment Adviser with the SEC. Francis Investment Counsel does not provide tax or legal advice.