No matter your age, there is an answer to this question. And I’ll share it with you in this blog. Depending on how old you are and how much you have in savings, you are either going to like the answer or not.I was driving to work this week when I heard a financial planner on the radio explain that to reach a million dollars in your retirement nest egg at age 67, you will need to save $166 a month ($2,000 a year) beginning at age 20. That seemed doable and a piece of advice I was looking forward to sharing with my two children.
The financial planner then went on to explain that if someone waited until age 40 to save for that one million dollar retirement nest egg, that person would have to save $880 a month. That’s five times the amount needed by the 20-year-old!
That’s probably not news to you – or even surprising – to hear. But it is certainly a blunt reminder about how important it is to put yourself on a savings plan and stick to it.
So how much will you need to save every month if you want to reach the million dollar mark by age 67? This calculator, provided by our financial partner BALANCE, will help you find your number. Enter the number of years that you plan to save money, the average rate of return you expect from your savings, and your current tax bracket. What I like about this tool is that you can re-visit it often to make adjustments as your financial situation changes. It can help you stay focused on your financial goal.
To make it even easier to save, consider an automatic deposit into a savings account from your paycheck. Talk to your employer about your options. One of the popular savings tools available at Hanscom FCU is our popular one-year CU Thrive savings program. Take a look at this rate to see why so many take advantage of this account, and learn more about setting up this savings to help you reach your goal.