Want to be a Millionaire by 65? This is How Much You Need to Save Each Month

Without a doubt, the most coveted financial milestone in our culture is “millionaire status.” Everybody wants to be a millionaire! But what does it take to become a millionaire? Many people think you need to have a rich uncle who leaves you his inheritance or win the lottery or create an app. The truth is anybody can become a millionaire. It’s simple, so that means everybody can do it. But it’s hard, and it takes discipline, so not everyone will do it.

“If you do what is easy, your life will be hard. If you do what is hard, your life will be easy.”

Like most things in life, the earlier you start, the easier it will be. If you are in your 20’s and you are reading this post, you may not feel like you have much money, but you have one of the most important assets in wealth creation, TIME.

Due to the Miracle of compound interest, if you are 20 years old, you can become a millionaire by the time you’re 65 years old by only investing $175,000 over the next 45 years. $175,000 might seem like a lot of money, but stop and think about what that means. If you are investing only $175,000 to become a millionaire, that means you will have earned $825,000 in investment/interest income over that time period. You only had to put in 17.5% of the money to become a millionaire. This is a great example of the power of compound interest. So if you are young and you do the hard thing now and start saving, your retirement and financial life will be a lot easier than most people.

OK, so I promised to tell you how much you will need to save each month from becoming a millionaire, so let's jump into it.

The Math to Become a Millionaire by age 65

First thing’s first, we need to lay out the assumptions that these calculations are based on. Any variation of these assumptions can change the math (and, of course, in reality, these assumptions won’t hold perfectly). In these calculations, we assume you start with $0 in savings and receive an annual return on investments of 7%. Also, we assume that your monthly contributions increase each year by 2% to keep up with inflation. So, if you were depositing $100 per month in year 1, you will be depositing $102 per month in year 2, and so on.

Monthly Savings Required to Become a Millionaire by 65

• Starting at age 20, you would need to save $204 per month
• Starting at age 25, you would need to save $298 per month
• Starting at age 30, you would need to save $443 per month
• Starting at age 35, you would need to save $670 per month
• Starting at age 40, you would need to save $1,030 per month
• Starting at age 45, you would need to save $1,650 per month
• Starting at age 50, you would need to save $2,795 per month
• Starting at age 55, you would need to save $5,310 per month
• Starting at age 60, you would need to save $13,500 per month
• Starting at age 64 (It’s never too late?), you would need to save $85,000 per month

Of course, this math changes depending on your current age, how much you already have saved, and the return on your investment, but I hope one thing becomes extremely clear from this article the sooner you start, the easier your (financial) life will be!

Where are you guys on your journey? Based on this math, are you “on track” to reach millionaire status by 65? Even earlier, perhaps? Let me know in the comments!

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This article is for informational purposes only. It should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.