Saving for Retirement - How Does $1 Million Sound to You?

Posted by on Tuesday, March 25th, 2014 at 9:01pm.

If you're saving for retirement, how much money would you actually have to put away in order to retire quite comfortably with $1 million? It certainly is a good goal to shoot for since it's basically a guarantee that we will have to deal with inflation during our lifetimes.

The amount of money that you have to put away would definitely depend on how early you start saving. If you're starting out at the age of 20, which would be a wise thing to do, you would need to put away about $360 monthly into an investment that pays a 6% return rate per year. If you're starting out at the ripe age of 25, you'd need to pay approximately $500 monthly.

The amounts grow if you decide to start saving at an older age. Fortunately, when you start young you can take compounding interest into account too. You'll also have to look for investments that produce the high annual return rate of 6%.

There is a simple calculator that you can use located at http://www.math.com/students/calculators/source/compound.htm. You'll be able to fool around with the calculator to figure out exactly how much money you'll need to put away in order to save for your retirement. There is another one that is a bit more complicated at http://retirement-calculator.tdcanadatrust.com/about-you.html. With this calculator, your annual income before taxes also becomes a part of the equation. You can also use our mortgage calgulator in the link below to figure out your monthly mortgage payments.

The earlier you start saving for your retirement, the better off you're going to be during your golden years. Part of your retirement plan should also include a home investment. You can usually safely predict that the price of your home will stay in line with the rise in inflation during the years. This makes real estate one of the best investments possible. You need to live somewhere so you might as well be putting your monthly housing payments into the bank towards your own mortgage. It's a lot better than paying rent to help your landlord meet his regular monthly payments that help fund his retirement.

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