A sizeable number of Americans hope to retire with at least $1 million, according to Bankrate’s latest savings survey. While that can seem like a lofty goal, it’s possible to achieve with the right planning. To illustrate the savings required, calculations show how much you would need to save each month to retire with $1 million at age 65, starting at various ages.
If you start at age 25, earning a 5% annual rate of return, you would need to save $655 per month. Earning a 7% return, you would need to save $381 per month, and earning a 9% return, you would need to save $214 per month. If you start at age 30, earning a 5% annual rate of return, you would need to save $880 per month.
Earning a 7% return, you would need to save $555 per month, and earning a 9% return, you would need to save $340 per month. If you start at age 35, earning a 5% annual rate of return, you would need to save $1,202 per month. Earning a 7% return, you would need to save $820 per month, and earning a 9% return, you would need to save $546 per month.
Achieving monthly retirement savings goals
If you start at age 40, earning a 5% annual rate of return, you would need to save $1,679 per month. Earning a 7% return, you would need to save $1,234 per month, and earning a 9% return, you would need to save $892 per month.
As these calculations demonstrate, the sooner you start saving for retirement, the less money you’ll need to set aside each month. The good news is that even starting at age 40, you could still retire with $1 million if you substantially increase your monthly contributions. It’s essential to focus on what you can control, such as the percentage of your annual income you consistently contribute toward your retirement accounts.
Generally, aim for a steady contribution rate, as advised by experts including Anne Lester, a retirement expert and author. If you don’t know how much you’ll need to retire, you’re not alone. Almost a quarter of workers are unsure of their retirement needs, according to Bankrate’s survey.
Starting with a goal and clear plan can help guide your savings strategy. To estimate how much you may need based on various factors like age, current savings, and income, consider using financial planning tools and seeking professional advice to ensure you’re on the right track towards a comfortable retirement.
