Dreaming of retiring comfortably with at least $1 million in your bank account? It’s not impossible, but it will require some careful planning and smart investing. Here’s how much you should start investing today to reach that goal.
First, determine how many years you have until retirement. The earlier you start investing, the better, as compound interest will work in your favor. For example, if you are 30 years old and want to retire at 65, you have 35 years to save.
Next, consider your expected rate of return on your investments. On average, the stock market has returned around 7% per year after inflation. Keep in mind that this is just an average, and actual returns can vary.
To reach $1 million by retirement, you will need to calculate how much you need to invest each month. Using a retirement calculator can help you determine this amount based on your age, expected rate of return, and retirement age.
For example, if you are 30 years old and expect a 7% annual return, you would need to invest around $500 per month to reach $1 million by age 65. However, if you wait until you are 40 to start investing, you would need to invest around $1,000 per month to reach the same goal.
Remember, these are just estimates and your actual investment needs may vary. It’s important to regularly review your retirement plan and adjust your investments as needed to stay on track to reach your goal of retiring comfortably with at least $1 million.