A significant number of Americans hope to retire as millionaires, according to Bankrate's latest savings survey. This may seem like a lofty goal, but with proper planning, it is achievable.
According to , more than one-third of American workers say they need $1 million or more to retire comfortably. Bankrate Survey. The median amount they think they need to save is about $875,000. And among each generational cohort, Millennials are the most likely to believe they need to save at least $1 million to retire comfortably.
The numbers show that it's possible, even if you start preparing after age 30.
How much you need to retire will depend on personal factors like where you plan to live and how often you want to travel, but the key to reaching your retirement savings goals is to have a strategy you can stick with. It's about finding out. Consistently.
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“It's important to realize this is a marathon, not a sprint,” Matt Schultz, chief credit analyst at LendingTree and author of “Ask questions, Save Money, Make More,” told CNBC told Make It. “Otherwise, you run the risk of ultimately getting discouraged and stopping the process before you actually reach your destination.”
With this in mind, CNBC calculated how much you would need to save each month to retire with $1 million at age 65, starting at ages 25, 30, 35, and 40. Note that these calculations assume a starting balance of $0. It doesn't take into account unexpected life events such as market fluctuations, layoffs, promotions, etc.
If you start at age 25
- To earn a 5% annual return: $655 per month
- Earn 7% annual return: $381 per month
- Earn 9% annual return: $214 per month
If you start at age 30
- To earn a 5% annual return: $880 per month
- Earn 7% annual return: $555 per month
- Earn 9% annual return: $340 per month
If you start at age 35
- To earn a 5% annual return: $1,202 per month
- Earn 7% annual return: $820 per month
- Achieve 9% annual return: $546 per month
If you start at age 40
- To earn a 5% annual return: $1,679 per month
- Earn 7% annual return: $1,234 per month
- Earn 9% annual return: $892 per month
As the math shows, the earlier you can start saving for retirement, the less money you'll need to put aside each month.
The good news is that even if you don't start saving for retirement until you're 40, you could potentially retire with $1 million if you significantly increase your monthly contributions.
Manage your retirement savings
Having an overall retirement savings goal can be helpful during the planning process, but be aware that the numbers reflected in your account can change depending on factors beyond your control, such as stock market downturns or upswings. Please.
That's why you should focus on what you can control. For example, the percentage of your annual income that you continually contribute to a retirement investment account. savings rate.
Generally, Savings rate 15%according to Fidelity Investment, one of the nation's largest 401(k) providers.
If you're in your 30s or 40s and still haven't put anything away, you'll likely need to significantly increase your contribution rates to get this back, says retirement expert and author of Your Best Financial Life: Save. Anne Lester says. Be smart now for the future you want. ”
Not sure how much you need to retire? You're not alone. Almost a quarter of workers belong to that camp, according to Bankrate research.
CNBC Make It's Retirement Calculator estimates how much you need and how much you need to save each month to reach that goal, based on factors such as your age, how much you already have saved, and your income. Provide.
“One of the first necessary or useful steps on the road to success is to identify your goals and develop a plan and process,” Mark Hamrick, senior economic analyst at Bankrate, said in a Bankrate report. ” states. “Doing anything else is the economic equivalent of driving without a seatbelt, or worse, blindfolded.”
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