How much do you need to save every week or month to become a retirement savings millionaire? Most people cannot even dream of saving this much money or ever having a million dollars, yet many consumers do it all of the time because they have focused on managing their money in such a way that they are able to deal with all of their expenses and still save money. In this post we will do a few calculations to show you just how easy it is to become a retirement millionaire and also the major advantage of starting early in life to save for retirement.
Retirement Savings Millionaire – Saving Money
The chart below demonstrates several fundamental rules. The earlier you start saving and the longer you save, the more money you will have for retirement. For example if start at age 20 and save $150 a week, you can easily have one million saved by the time you are 55. Wait until 65 and you have doubled your savings in 10 years. If you wait until you are older, you will have to save more each month in order to match the same numbers e.g. at age 40 you need to save $3500 a month to make that one million mark by the timeÂ you are 55. And if you wait until age 50, can you really save $15,000 a month?
We have assumed a 7% return on average over the life of these savings. The stock market has returned this rate for many years. Although there has been a lot of volatility in that period with some years much higher and some years much lower. But people who consistently save their money and do not touch until retirement can easily meet this goal of one million dollars by the time they are 55 simply by saving $600 a month and becoming a retirement savings millionaire.
|Age to Start Savings||Amount to Save Each Month||Avg Interest Rate||Save to 55, then Retire||Save to 65 Then Retire|
|Â 20||Â $100||Â 7%||Â $176,560||
|Â 20||Â $600||Â 7%||Â $1,005,982||Â $2,079,397|
|Â 40||Â $3500||Â 7%||Â $1,058,177||Â $2,661,887|
|Â 50||Â $15,000||Â 7%||Â $1,036,535||$4,525,982|