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Becoming a millionaire isn't as hard as you would think. For ease of numbers, let's talk about how to become a millionaire using only your retirement accounts. This is an incomplete picture because your home and other accounts contribute to your net worth and would help push you over the millionaire net worth mark, but for simplicity we will use only retirement investing for now.
SO HOW MUCH MONEY DO YOU HAVE TO SAVE MONTHLY TO BECOME A MILLIONAIRE BY 65?
This varies depending on your current age, as one of the major contributors to the end balance is how much time you have left before age 65 for compound interest to work in your favor. Let's look at the numbers by age. We will assume you are starting with an initial investment balance of 0, and that you receive an 10% rate of return.
Notice that the amount you have to save per month dramatically increases the longer you wait to get started. These numbers are assuming you have ZERO dollars in your retirement account at the starting age, so if you have any money saved you are ahead of the game! I hope this reassures you that achieving millionaire status is practical and possible for people of any income level if you start early and stay consistent. Don't forget that achieving a million dollars in the bank is a great retirement goal, but ultimately your retirement savings goal should be more specific to you and your needs. Depending on your lifestyle plans, $1M may not be enough. Check out retirement nest egg calculators online to help you determine this number.
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