We calculated how much you would need to invest each month, starting at various ages, to save $1 million by 65. We also used several annual rates of return. On average, the stock market has returned 10 percent annually over the long term, but this rate is closer to 6 percent when you adjust for inflation.
The table below reveals how much individuals would need to put aside each month, based on their ages and the rate of return. While the rate of return obviously has a profound effect on total savings, it’s clear that Americans who start saving early have a strong advantage over those who wait until their 40s or even 50s to plan for retirement.
Investing in stocks — or mutual funds that hold a variety of stocks — is the key to getting the returns you need to reach your goals. Fidelity Investments found that those with more than $1 million in their 401k accounts had more than 70 percent of their assets invested in equities.
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