Setting aside $10 a day could help you save over $1 million for retirement—but you have to start early (2024)

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Setting aside $10 a day could help you save over $1 million for retirement—but you have to start early? ›

The math is compelling; according to CNBC's calculations, if a 21-year-old began setting aside roughly $10 per day ($70 per week) in a retirement investment account earning a 7% annual return, it could grow to just over $1 million by age 65. The strategy's power comes from the time given for investments to grow.

Nearly 399,000 Americans also have a least $1 million in an individual retirement account. The key to stashing away such sums? Start early and contribute to your retirement plan consistently over many years, Fidelity said.

Retiring at 65 with $1 million is entirely possible. Suppose you need your retirement savings to last for 15 years. Using this figure, your $1 million would provide you with just over $66,000 annually. Should you need it to last a bit longer, say 25 years, you will have $40,000 a year to play with.

Saving just 10 dollars a day would mean $3,650 more each year to invest in your future. Saving 20 dollars a day adds up to about $600 a month or $7,300 each year! Save $7300 for 20 years compounded at 5% and you'll have $253,450—over a quarter of a million dollars!

At age 35, you would need to save $700 a month to reach $1 million by age 65. Starting to save at age 35 will provide you with more flexibility than at age 50 but can still be difficult considering the many common expenses you'll incur during this life stage.

Employee Benefit Research Institute (EBRI) data estimates that just 3.2% of Americans have $1 million or more in their retirement accounts. Here's how much most Americans have saved and what you can do to boost your retirement savings.

There are estimated to be a little over 8 million households in the US with a net worth of $3 million or more.

The ideal monthly retirement income for a couple differs for everyone. It depends on your personal preferences, past accomplishments, and retirement plans. Some valuable perspective can be found in the 2022 US Census Bureau's median income for couples 65 and over: $76,490 annually or about $6,374 monthly.

Yes, it is possible to retire comfortably on $500k. This amount allows for an annual withdrawal of $30,000 and below from the age of 60 to 85, covering 25 years. If $20,000 a year, or $1,667 a month, meets your lifestyle needs, then $500k is enough for your retirement.

How much is $10 a week for 20 years? ›

Just for fun, here's what would happen if you continued to invest $10 beyond the 10-year mark. After 15 years of investing $10 per week, you could expect to have $12,967. In 20 years, that number would have grown to $21,154. In 25 years, that little $10 a week would be worth $32,637.

Setting aside $10 a day could help you save over $1 million for retirement—but you have to start early. Although the thought of saving $1 million or more by the time you reach retirement age may seem overwhelming, the process doesn't have to be — especially if you start early.

If you saved $10 a day for 10 years you would have $36,500. As far as gaining money is concerned, I recommend you save that money and then invest it instead of letting it sit in a bank account. That's not counting leap year days which would add 2–3 days to the math depending on if the first year was a leap year or not.

If invested with an average annual return of 7%, it would take around 15 years to turn 500k into $1 million.

In fact, a recent survey found that investors believe they'll need at least $3 million to retire comfortably. But retiring with $1 million is still possible, even as early as age 55, if you're smart about it. It will require some careful planning since you'll have to wait 10 years for Medicare, but it can be done.

How Long Will Becoming a 401(k) Millionaire Take? If you invested $23,000 into your 401(k) each year and earned a consistent 8% return each year, you'd achieve a plan balance of $1 million in slightly under 20 years. Note that this does not factor in a potential employer match.

For example, if you have retirement savings of $1 million, the 4% rule says that you can safely withdraw $40,000 per year during the first year — increasing this number for inflation each subsequent year — without running out of money within the next 30 years.

How many Americans have $100,000 in savings? About 26% of U.S. households had more than $100,000 in savings in retirement accounts as of 2022, according to USAFacts, a nonprofit organization that analyzes data from the Federal Reserve and other government agencies.

Believe it or not, data from the 2022 Survey of Consumer Finances indicates that only 9% of American households have managed to save $500,000 or more for their retirement. This means less than one in ten families have achieved this financial goal.

$10 Million Is A Top One Percent Net Worth

Therefore, if you can't retire off 10 million dollars comfortably, you've got some serious problems!