Many young Americans want to retire as millionaires and are quite optimistic about achieving that goal.
Most Americans believe they need to have $1 million or more saved by retirement, and the amount varies slightly by age group. According to Northwestern Mutual’s 2023 forecast, people in their 20s believe they need about $1.2 million in retirement savings, while those in their 30s and 40s need about $1.44 million and $1.28 million, respectively. It has said.Planning and progress survey. ”
These may seem like lofty goals, but a Northwestern Mutual study conducted online interviews with 2,740 U.S. adults 18 and older found that just over half of respondents said they would quit the job when the time came. He says he feels financially prepared for it.
It’s important to note that the amount you need to save for retirement will depend on a number of factors about you, including where you plan to live, whether you plan to continue working part-time, and the type of medical expenses you have. Must be covered.
But let’s say you want to set very ambitious retirement goals. CNBC calculated how much he would need to save each month if he wanted to retire with $5 million by age 67. These calculations are based on starting savings at age 21, 25, and 30 and having a starting balance of $0. It does not take into account unpredictable life events such as market fluctuations, promotions, or layoffs.
And since retirement experts generally say you should save about 15% of your income for retirement, CNBC also notes how to save $5 million without exceeding that 15% savings rate. Calculated the required annual income.
If it starts at 21:00
To earn a 5% annual return: $2,324 per month
- Annual income required to save 10% of income: $278,899
- Annual income required to save 15% of income: $185,942
Earn 7% annual return: $1,226 per month
- Annual income required to save 10% of income: $147,089
- Annual income required to save 15% of income: $98,064
Earn 9% annual return: $616 per month
- Annual income required to save 10% of income: $73,964
- Annual income required to save 15% of income: $49,312
If you start at age 25
To earn a 5% annual return: $2,922 per month
- Annual income required to save 10% of income: $350,601
- Annual income required to save 15% of income: $233,745
Earn 7% annual return: $1,643 per month
- Annual income required to save 10% of income: $197,128
- Annual income required to save 15% of income: $131,425
Earn 9% annual return: $889 per month
- Annual income required to save 10% of income: $106,629
- Annual income required to save 15% of income: $71,090
If you start at age 30
To earn a 5% annual return: $3,905 per month
- Annual income required to save 10% of income: $468,566
- Annual income required to save 15% of income: $312,393
Earn 7% annual return: $2,385 per month
- Annual income required to save 10% of income: $286,185
- Annual income required to save 15% of income: $190,800
Earn 9% annual return: $1,410 per month
- Annual income required to save 10% of income: $169,215
- Annual income required to save 15% of income: $112,816
You may not want to retire as a millionaire, but it helps to know how much you need to save to cover your living expenses after you stop working full-time. CNBC Make It Retirement calculators can help you calculate your retirement savings based on factors such as your current age, income, and savings.
And if you can’t make these retirement contributions yet, there’s no need to panic. It’s okay to start with what you can and increase your contributions over time.One way he does that is by increasing donations 1% each year Until you reach the recommended 15% savings rate.
But it’s important to start early. By starting sooner rather than later, you can take advantage of the power of compound interest and your money will grow exponentially.
“Investing while you’re young not only gives your money a chance to grow to a level that has a big financial impact on your future, but it also gives you the opportunity to learn about investing, try new things, and ultimately develop yourself.” “We offer you the opportunity to prepare for a successful financial future,” Personal Investing President Joanna Rotenberg said in Fidelity.Q2 2023 Retirement Analysis. ”
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check out: If you earn $80,000 a year, how much do you need to save each month to retire with $1.5 million?