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A few days ago I posted on this blog about an article in Kiplinger’s Personal Finance talking about how you can become a millionaire at any age. The article talked about people at ages 25, 35, 45 and 55 – and how much they would need to save at those ages in order to get to that magical 7 figure number.
As an example, the demographic I most closely fit into was the 35 year old bracket. Here is what it had to say about that:
At Age 35
You’ve Saved: 0$
To reach one million by age 65 you need to save $671 per month.
If You’ve Saved: $50,000
To reach one million by age 65 you need to save $304 per month.
* Aim to save 15% of your gross income
* Shift your assets to 90% stocks and 10% bonds.
* Invest in a 529 college-savings plan
I’m just about where I need to be to have that million dollars by the time I retire. I was still curious, however, to find out just when I’ll have a million dollars in the bank, and when I can expect that to happen.
For that I went to CNN Money where they have a millionaire calculator. Essentially you input your current assets, the amounts you save and a few other pieces of information, and it tells you at what age you’ll cross over into 7 figures in the bank. For me the number was right around 55. What age are you going to make your first million?
Over at Free Money Finance today he touched on an article with a family that retired in their 40s. They may be a good example of how you can get ahead faster if you are willing to make some sacrifices.
The next time I talk about being a millionaire, I’ll touch on the subject, “Will a million dollars be enough when I retire?”.
LINKS:
Calculate when you’ll have a million dollars
How to make a million dollars
What it takes to be rich
Four steps to long term financial success
Last Edited: 28th April 2009
{ 1 comment… read it below or add one }
I live your closing question (“Will a million dollars be enough when I retire?”) because it’s such a loaded one …
… we’d love to BELIEVE that it will be enough, but for most, it won’t. Why?
Simple mathematics; if you have $1 mill. and inflation is averaging 4%, then the first 4% of your return goes just to keeping up with inflation. So, now just keeping your money in the bank isn’t enough.
So, let’s say that you can earn 9% on your money (in the stock market … crashes aside? Hopefully!), then that’s ‘just’ $50,000 after inflation.
But, if you’re retiring in 20 years, $50k is (again, ‘just’) like $25k today … so the real question becomes: “Will $25k a year be enough when I retire?”
Now, that’s up to you to decide … all I can say is that I’m struggling on $250k a year in retirement
ajc @ 7million7years´s last blog ..When will you be a millionaire?