Want $3 Million by Retirement? Here’s How Much to Invest Each Month, by Age

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Aiming for the $3 million mark by retirement might sound overly ambitious. While Americans believe they only need about $1.46 million to retire comfortably, the truth is, $3 million is totally doable with the right strategy.

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To achieve this, you need to invest a specific amount each month, but this number varies significantly based on how much time you have until retirement.

By using a 7% return to reflect historical stock market performance, accounting for inflation and considering compound interest, here’s the breakdown of how much you should consider investing monthly based on your age group to make sure your golden years are comfortable.

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If you’re in your 20s and ready to start investing, congratulations! This is the best time to begin, as you have the advantage of time on your side. By putting away about $400 a month, you can set yourself up for significant financial growth.

With nearly 40 years until retirement, your investment can grow substantially due to the power of compounding interest. For instance, investing $400 monthly in a balanced portfolio with a 7% annual return may net you $3 million by 65. According to Forbes, starting early allows your money to compound over time, making a significant difference in your total savings at retirement.

Additionally, consider that many young adults face student loans and other financial pressures. However, starting small is better than waiting; even if you can only invest $200 at first, increasing your contributions over time can still lead to impressive results. Remember, every dollar counts.

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So, what if you’re starting this journey in your 30s? You’ll want to ramp up your monthly contributions to about $800. With roughly 30 years until retirement, this investment strategy can still lead you to that coveted $3 million goal.

Many people in their 30s might be starting families or buying homes, which can strain finances. However, prioritizing retirement savings now can pay off tremendously later.

Consider setting up automatic contributions to make saving easier and more consistent. If you invest $800 monthly in a portfolio with an average annual return of 7%, you could still reach approximately $3 million by retirement. Plus, you would thank yourself for not waiting for your 40s because the required investment amount doubles.

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