How much you need to save to be a millionaire by age 65

How much you need to save to be a millionaire by age 65
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More than a decade ago, Clark showed how a teenager who starts saving at 15 and puts aside $2,000 for 7 years will have more than $1 million at retirement.

Over the years, people have challenged this claim and the methodology behind the numbers. So now some personal finance columnists have run the numbers and they corroborate what Clark has always said.

Read more: Clark’s Investment Guide: How to save with a Roth

How much to save to be a millionaire by age 65

According to Gail MarksJarvis at The Chicago Tribune, if a 16-year-old saves $2,000 annually for six years into a Roth IRA account and stops at age 21, they’ll have $1 million when they turn 65.

This assumes a 9.4 percent average gain annually, which has been the average return on the stock market since 1926, according to The Chicago Tribune article.

Saving money early — not even often, just early — will still ultimately lead you to $1 million in wealth at the time of retirement. If you keep saving after your 21st birthday, you’d end up with somewhere between $2 and $3 million at retirement.

Read more: Investing FAQs: How to start saving for retirement right now

The key is to save early

That’s the hardest part. Most people don’t start thinking about saving until their 40th birthday. But if you start early, it makes a big, big difference down the road. Sean Williams from did a analysis in 2016 on how much one needs to save annually to be a (tax-deferred) millionaire by age of 65. His calculations assumed a moderate 7% growth rate, starting with NO money down.

  • Age 20:    $3,500 annually
  • Age 25:    $5,010 annually
  • Age 30:    $7,234 annually
  • Age 35:    $10,587 annually
  • Age 40:    $15,811 annually
  • Age 45:    $24,394 annually
  • Age 50:    $39,795 annually
  • Age 55:    $72,378 annually
  • Age 60:    $173,891 annually

Read more: Over 40 with no retirement savings? Take these 6 steps

Clark Howard About the author:
Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. More about Clark
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