Here’s How Much You Should Save Each Month To Retire by 65

Retirement projections can be a tricky thing, as there are many variables to consider. The one thing that all experts can agree on, however, is that the earlier you start, the better off you’ll be.

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Age 20 Age 30 Age 40 Age 50 Age 60

The power of compound interest is so strong that saving even smaller amounts over a longer period of time will generate more wealth than contributing more later. Of course, your choice of investments will also play a big role.

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If you invest solely in the stock market, for example, and earn an average annual return of 10%, your account will grow much more rapidly than if you only earn a 6% return, for example. However, even if you invest in a lower-return asset, saving consistently over the long run is still the path to long-term wealth.

Whether you’re looking to amass $1 million or $2 million, here’s a look at how much you should save each month, by investing in different assets, to retire by 65.

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Age 20

Monthly savings to reach $1 million, earning 6%: $363
Monthly savings to reach $1 million, earning 10%: $96
Monthly savings to reach $2 million, earning 6%: $726
Monthly savings to reach $2 million, earning 10%: $191

Starting a retirement fund at age 20 is one of the best and easiest ways to accumulate a sizable nest egg. With just a few hundred dollars, you could easily end up with an account value over seven digits by the time you retire.

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Age 30

Monthly savings to reach $1 million, earning 6%: $702
Monthly savings to reach $1 million, earning 10%: $264
Monthly savings to reach $2 million, earning 6%: $1,404
Monthly savings to reach $2 million, earning 10%: $527

At age 30, you’ll likely be earning more than you were in your 20s, perhaps significantly more. This can make it easier to save the required amount to earn a $1 million or $2 million nest egg. You’re still young enough so that compound interest has the time to do much of the heavy lifting for you.

Age 40

Monthly savings to reach $1 million, earning 6%: $1,443
Monthly savings to reach $1 million, earning 10%: $754
Monthly savings to reach $2 million, earning 6%: $2,886
Monthly savings to reach $2 million, earning 10%: $1,508

Once you reach age 40, you still have a few decades to save up for retirement, but things won’t be as easy as when you were younger.

Age 50

Monthly savings to reach $1 million, earning 6%: $3,440
Monthly savings to reach $1 million, earning 10%: $2,413
Monthly savings to reach $2 million, earning 6%: $6,880
Monthly savings to reach $2 million, earning 10%: $4,826

Once you reach age 50, you’re likely in your peak earning years. This means you can maximize your contributions to your retirement accounts. You can also take advantage of catch-up contributions to your IRA and/or 401(k) plan to boost your returns, something you might need to do with retirement only 15 years away.

Age 60

Monthly savings to reach $1 million, earning 6%: $14,333
Monthly savings to reach $1 million, earning 10%: $12,914
Monthly savings to reach $2 million, earning 6%: $28,666
Monthly savings to reach $2 million, earning 10%: $25,828

If you’re waiting until age 60 to start funding your retirement, you’re really behind the eight ball. With only five years to save until you stop working, you’ll have to set aside an enormous chunk of your salary if you want to accumulate $1 million or more. It’s still theoretically possible, though, depending on your income and your investment returns.

Editor’s note: Ramsey Solutions’ investment calculator was used for calculations, but these figures are not a guarantee. Please consult with a financial advisor about your personal retirement savings plan.

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