Retirement prediction can be a tricky thing, as there are many variables to consider. But one thing all experts can agree on is that the earlier you start, the better you will be.
The power of compound interests is so powerful that saving smaller amounts over a longer period of time will generate more wealth rather than contributing more wealth later on. Of course, the investment you choose will also play an important role.
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For example, if you invest only in the stock market and your average annual rate of return is 10%, your account will grow much faster than if you only get a return of 6%. But even if you invest in low returns assets, consistent savings are still a path to long-term wealth in the long run.
Whether you want to accumulate $1 million or $2 million, here are how much money you should save every month by investing in different assets to retire 65.
Monthly savings reach $1 million, with 6% income: $363
Monthly savings reach $1 million and revenues 10%: $96
Monthly savings reach $2 million, with 6% income: $726
Monthly savings reach $2 million and revenues 10%: $191
Starting a retirement fund at the age of 20 is one of the best and easiest ways to accumulate large amounts of nest eggs. For just a few hundred dollars, you can easily get more than seven-digit account value when you retire.
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Monthly savings reach $1 million, with 6% income: $702
Monthly savings reach $1 million and revenues 10%: $264
Monthly savings reach $2 million, with 6% income: $1,404
Monthly savings reach $2 million and revenues 10%: $527
At 30, you may make more money than in your 20s, and maybe much more. This can make it easier to earn $1 million or $2 million in nest eggs the amount needed. You are still young, so complex interests have time to do a lot of heavy work for you.
Monthly savings reach $1 million, with 6% income: $1,443
Monthly savings reach $1 million and revenues 10%: $754
Monthly savings reach $2 million, with 6% income: $2,886
Monthly savings reach $2 million and revenues 10%: $1,508
Once you reach 40, you still have decades to save on retirement, but things aren't as easy as they were when you were young.
Monthly savings reach $1 million, with 6% income: $3,440
Monthly savings reach $1 million and revenues 10%: $2,413
Monthly savings reach $2 million, with 6% income: $6,880
Monthly savings reach $2 million and revenues 10%: $4,826
Once you reach 50, you may be at your peak. This means you can maximize your contribution to your retirement account. You can also take advantage of catch-up donations to IRA and/or 401(k) plans to increase earnings, which may require retirement for only 15 years.
Monthly savings reach $1 million, with 6% income: $14,333
Monthly savings reach $1 million and revenues 10%: $12,914
Monthly savings reach $2 million, with 6% income: $28,666
Monthly savings reach $2 million and revenues 10%: $25,828
If you're going to wait until you're 60 to start funding your retirement, you're really lagging behind eight goals. Only five years will save until you stop working and if you want to accumulate $1 million or more, you have to put a single salary on hold. However, this is still theoretically possible depending on your income and return on investment.
Editor's Note: Ramsey Solutions' investment calculator is used for calculations, but these numbers are not guaranteed. Please consult a financial advisor about your personal retirement savings plan.
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This article originally appeared on gobankingrates.com: Here is how much you want to save every month to retire 65