Here’s how much you need to save each month to have $1,000,000 at age 65

I’ve had a few people asking me this question lately, so I decided to crunch the numbers and summarise it into a simple matrix for all. I hope it gives you some inspiration.

Find your age on the left hand column, and select the rate of return you expect to receive on your investment, and the corresponding number is how much you need to save/invest each month in order to reach the target amount at age 65.

If you’re investing in markets like property or stocks, you probably want to refer to rates of return on the far right. If you’re investing in markets like cash or fixed income, you probably want to refer to rates of return on the far left. And for those of you with diversified portfolios, well, somewhere in the middle.

Here’s how much you need to save each month to reach $1,000,000 by the time you’re 65

Here’s how much you need to save each month to reach $2,000,000 by the time you’re 65

Here’s how much you need to save each month to reach $3,000,000 by the time you’re 65

Here’s the key points:

  1. If you have a goal, design a plan, and execute it.
  2. The longer you go without investing, the more you need to save, or the more risk you need to take.
  3. The younger you are, the less you need to save.
  4. Investing in cash for long periods of time doesn’t seem like a good idea over the long-run.
  5. Investing in property and stocks should reward you over the long run, and help reduce the level of monthly savings.
  6. Mandatory superannuation contributions are such an easy way to help achieve these goals. For example, if you’re 40 and saving $25,000 pa, with an annual return of 8% pa, you should have about $2,000,000 by the time you’re 65.