Retiring with $1 Million
Retiring with $1,000,000 isn't as hard as you might think when you factor in two critical factors - return on investment and time.
Let's begin with a very realistic rate of return - 6% per year. While the stock market will have good years and bad years, averaging 6% return on investment is very realistic.
Time is our biggest factor in success. Just how big? The numbers below show what it will take to retire with $1,000,000.
|If you begin at age||Invest this much per month|
At age 23, you're just starting your career. You're not going to be earning a lot of money yet. Plus you'll be paying rent, making car payments, paying student loans and all the expenses that come with starting your career. Finding $400 a month isn't easy! Let's hold off just a year or two...
Soon you're 25. You've gotten a promotion at work so you're making more money, but still not a whole lot more that just a couple years ago. But now it'll cost an extra $100 a month to retire with $1,000,000. Even finding $400 in your budget is hard, let alone $500. So let's just get some bills caught up and we'll go from there, right?
But it's even harder later. By 35, you'll definitely be earning more, but you'll probably have a mortgage and perhaps children. $500 a month won't get you there anymore - you need to DOUBLE your monthly retirement investment! Finding $1,000 is even harder.
At 45 you're making still more. But your expenses are higher too. If you think children are expensive, try teenagers! Making it even worse, they're only a couple years away from college! The likelihood of having $2,500 a month is very, very small!
At 53, you're a little more than 10 years from retirement. If you begin saving now, you're in a lot of trouble! Your kids are probably out of college, and you may even have your mortgage paid off. However $5,000 a month is going to virtually impossible. If only uou had started investing 30 years earlier - because $400 a month is easy to find now!