Here's how much you need to save each month if you want to retire with $1 million in 20 years. (via CNBCMakeIt)
If you start saving around $400 a month in your 20s, you'll likely be able toBut what if you'd rather reach that seven-figure milestone — and become financially independent — much sooner?
CNBC calculated how much you need to save and invest each month in order to have $1 million, the amount experts typically recommend saving for retirement, in 20 years.$2,153These calculations don't account for the many variables that can affect your wealth over several decades, including windfalls, emergencies and rises or dips in the market. But it can give you a good idea as to whether you're on track to retire early.
However, unless you're planning to save more than 15% of your annual income, you'll need to earn a significant salary to achieve this goal. Here's how much you'd need to bring in if you want to reach $1 million in 20 years by saving 15% or less of your salary.
Still, it's important to keep in mind that not everyone's retirement goals are the same and even $1 million. It's also worth noting that you'll be hit with a penalty and taxes if you withdraw funds from your 401 or traditional IRA before age 59 1/2. So if you're looking to retire early, you'll need to explore other investment options.
To determine how much they actually need to maintain financial independence, many early retirees use thewhich says that if you can safely withdraw 4% a year from your retirement savings portfolio, you have enough in the bank to quit your job. So if you plan to live on $50,000 a year, you'll want to have $1.25 million when you retire. And to be safe, some experts recommend
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