Kiplinger: How to Make a Million
The latest edition of Kiplinger magazine has a retirement special and with it, an insert on how to reach a million dollars at different age groups. It is a pretty simple setup that they have and I took a look at the 35 year old age group, since I am a 30 something.
You’ve Saved: 0$
To reach one million by age 65 you need to save $671 per month.
If You’ve Saved: $50,000To reach one million by age 65 you need to save $304 per month.
We seem to to be in a good shape according to this chart. We have over $70,000 in retirement savings and plan to put in at least $350 per month, until our finances get better. Also, the assumptions above include an 8% annual growth in earnings. But why stop at a million? Who knows where that will lead us to in a 30 years?
I think we, as a couple, should be aiming for at least $2 million. Using a savings calculator over at dinkytown, we would need to put away $914 a month. Ouch! Upping the earning from 8% to 9%, changes the monthly investment to $625. Thats sound more promising. What about 10% you ask? Well we only need to sock away $374 per month. What a difference a percentage point makes.
I know that these numbers are just that. One can get carried away with the digits. The important thing is to set a goal and implement that. I feel that our our retirement saving are the only part of our financial life that is going well. I put alot of effort there a few years back to make sure we were diversified enough and it seems to be paying off. Yes, I would like to be putting more dollars towards that goal, but right now debt reduction is a priority.
Filed under: Finance and Investing
