How hard is it to become a millionaire? What benefits are there to beginning saving and investing early? Consider the table below.
Assuming you have no savings currently, how much would you have to save each year to get a million dollars by age 65?
Also shown, the annual contributions broken up to show how much you need to save monthly.
Here we assume the investor gets a 7% annual return on their investment.
Want to find out how better returns, early retirement or larger savings affects your total?
Try out our interactive compound interest calculator
Example from the table below:
If you started saving at age 20 and invested $3,499 per year ($291 per month) every year until age 65, you would have a million dollars at age 65. Compare that to if you waited and started saving at age 30, where you would have to save $7,233 per year every year until age 65 for the same result.
Look at the affects starting to invest early has!
Age | Years Remaining | Annual Contributions | Amount Per Month |
20 |
45 |
$3,499.57 |
$291.63 |
21 |
44 |
$3,757.69 |
$313.14 |
22 |
43 |
$4,035.90 |
$336.32 |
23 |
42 |
$4,335.91 |
$361.33 |
24 |
41 |
$4,659.62 |
$388.30 |
25 |
40 |
$5,009.14 |
$417.43 |
26 |
39 |
$5,386.76 |
$448.90 |
27 |
38 |
$5,795.05 |
$482.92 |
28 |
37 |
$6,236.85 |
$519.74 |
29 |
36 |
$6,715.31 |
$559.61 |
30 |
35 |
$7,233.96 |
$602.83 |
31 |
34 |
$7,796.74 |
$649.73 |
32 |
33 |
$8,408.07 |
$700.67 |
33 |
32 |
$9,072.92 |
$756.08 |
34 |
31 |
$9,796.91 |
$816.41 |
35 |
30 |
$10,586.40 |
$882.20 |
36 |
29 |
$11,448.65 |
$954.05 |
37 |
28 |
$12,391.93 |
$1,032.66 |
38 |
27 |
$13,425.73 |
$1,118.81 |
39 |
26 |
$14,561.03 |
$1,213.42 |
40 |
25 |
$15,810.52 |
$1,317.54 |
41 |
24 |
$17,189.02 |
$1,432.42 |
42 |
23 |
$18,713.93 |
$1,559.49 |
43 |
22 |
$20,405.77 |
$1,700.48 |
44 |
21 |
$22,289.00 |
$1,857.42 |
45 |
20 |
$24,392.93 |
$2,032.74 |
46 |
19 |
$26,753.01 |
$2,229.42 |
47 |
18 |
$29,412.60 |
$2,451.05 |
48 |
17 |
$32,425.19 |
$2,702.10 |
49 |
16 |
$35,857.65 |
$2,988.14 |
50 |
15 |
$39,794.62 |
$3,316.22 |
51 |
14 |
$44,344.94 |
$3,695.41 |
52 |
13 |
$49,650.85 |
$4,137.57 |
53 |
12 |
$55,901.99 |
$4,658.50 |
54 |
11 |
$63,356.90 |
$5,279.74 |
55 |
10 |
$72,377.50 |
$6,031.46 |
56 |
9 |
$83,486.47 |
$6,957.21 |
57 |
8 |
$97,467.76 |
$8,122.31 |
58 |
7 |
$115,553.22 |
$9,629.43 |
59 |
6 |
$139,795.80 |
$11,649.65 |
60 |
5 |
$173,890.69 |
$14,490.89 |
61 |
4 |
$225,228.12 |
$18,769.01 |
62 |
3 |
$311,051.67 |
$25,920.97 |
63 |
2 |
$483,091.79 |
$40,257.65 |
Just another example of how important saving early really is!
Start saving at age 40, and you need to save a little more than $1,300 per month to reach $1 million by age 65. Start saving just 5 years earlier, at age 35 and your required monthly contribution drops $500 to under $900 each month.
It is easier to sacrifice a little bit at age 20 to scrounge up $3,500 a year ($291 per month), than if you are age 40 and have to find a way to cut $16,000 ($1,317 per month) out of your budget.
This also doesn’t include any taxes. Again, stressing the importance of tax-friendly investment accounts like a Roth IRA.
Start saving early and reap the benefits later.