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How to Save 1.5 Million For Retirement (…And Is It Really Enough??)

Most people realize that saving 1 million dollars for retirement isn’t enough anymore. So naturally, they’re targeting to save more. The new target for most? $1.5 million. So now of course, the big question is, “How to save 1.5 million for retirement?!”.

Related: What is the Interest on 1 Million Dollars? (Is It Enough to Retire?)

And then, once you begin to understand how you can save 1.5 million for retirement, the next questions are:

  • How long does it take to save 1.5 million for retirement?
  • How much do I need to save to have 1.5 million for retirement?
  • Can you retire on 1.5 million comfortably?

…and a string of other questions that are along the same lines. 

In this post, we’ll explore the answers to all of these questions AND MORE! Let’s dive in!

What Is The Average 401k Balance For a 65 Year Old?

You want to know how to save 1.5 million dollars. But, before we immediately dive into the details of saving that 1.5 million dollars for retirement, it’s important to note where most people are with their finances at 65 years old.

Are they actually close to saving $1.5 million for retirement? Or are they far below that goal?

Based on a survey by TD Ameritrade (chart shown below), less than 12% of retirees have more than 1 million dollars saved for retirement. So that goal of earning $1.5 million dollars is a pretty lofty one compared to most.

It certainly isn’t impossible, but understand that if you do it, your wealth will rank within the top 10% in the United States!

How Much Do Retirees Have in Retirement

Want to know more about the average 401k balance for a 65 year old?

  • 38% of 65 year-olds have less than $100k in retirement
  • 36% of them have between $100k and $500k saved for retirement
  • 14% have between $500k and $1M
  • And, as we mentioned before, only 12% of 65 year-olds have a million bucks or more in their 401k 

So then what is the average 401k balance for a 65 year old?

Based on these numbers, the average 65 year-old likely has between $200k and $300k in their retirement accounts. So again, if you save up 1.5 million dollars for retirement, you’ll certainly be better than the average (but also remember…the average person is broke! So you should save way more than average!).

Related: How Much Should I Have in My 401k (at 20, 30, 40, 50, and 60 years old)?

How to save 1.5 million for retirement How to Save 1.5 Million For Retirement

You want to save 1.5 million for retirement, but you’re not sure how to get there.

  • What should you invest in? 
  • How much should you invest each month?
  • And how long will it take before you reach 1.5 million dollars?

I’ll provide you with some cornerstone information here to help.

For the most part, I invest in S&P 500 index funds. They have averaged 10% returns for many decades and are considered quite safe by many top investment professionals.

For the purposes of talking through some tangible numbers, let’s assume we can continue to earn 10% in the market with this investment strategy. With these returns, how much would we need to invest to earn 1.5 million dollars in 10 years, 20 years, 30 years, or 40 years?

How to Save 1.5 Million For Retirement in 10 years

If you earn 10% on your investments, how much will you need save each month to save $1.5 million in 10 years?

The answer: $7,325 a month

How to Save 1.5 Million For Retirement in 20 years

If you earn 10% on your investments, how much will you need save each month to save $1.5 million in 20 years?

The answer: $1,975 a month

How to Save 1.5 Million For Retirement in 30 years

If you earn 10% on your investments, how much will you need save each month to save $1.5 million in 30 years?

The answer: $665 a month

How to Save 1.5 Million For Retirement in 40 years

If you earn 10% on your investments, how much will you need save each month to save $1.5 million in 40 years?

The answer: $238 a month

…You know the moral of this story, right??

Start investing as early as possible! You won’t regret it!

How to save $1M for retirementHow Do I Save 1M For Retirement?

Perhaps you’ve only got 10 or 20 years left to save for retirement, and you just can’t contribute the thousands of dollars that are necessary each month to get to the 1.5 million dollars you were hoping for. 

What if you scaled back your goals a bit? What if now you’re wondering, “How do I save 1M for retirement?”

How could you do it?

And how much would you have to contribute each month to reach $1M in retirement?

How to Save a Million Dollars For Retirement in 10 Years

If you earn 10% on your investments, how much will you need save each month to save $1 million in 10 years?

The answer: $4,890 a month

How to Save a Million Dollars For Retirement in 20 Years

If you earn 10% on your investments, how much will you need save each month to save $1 million in 20 years?

The answer: $1,320 a month

Related: How to Live on $1 Million Dollars (And Not Run Out Before You Die!!)

How Long to Save 1.5 Million For Retirement?

Let’s say you’ve decided to save 1.5 million. Now the question is, “How much do I need to save to have 1.5 million for retirement? And for how long?”

Do you think you can earn 10% on your money? Then here are your stats:

  • If you contribute $7,325 a month, you can save $1.5 million in 10 years
  • If you contribute $1,975 a month, you can save $1.5 million in 20 years
  • Contribute $665 a month, it will take you 30 years to earn $1.5 million
  • Contribute $238 a month, and it will take you 40 years to get $1.5 million into your retirement account

How Long to Save 1.5 Million For Retirement at 6% interest?

Are you skeptical about earning 10% interest between now and your retirement party? 

What if we scaled that back to just 6%? Then how long will it take you to earn $1.5 million dollars earning 6% interest?

  • If you contribute $9,155 a month, you can save $1.5 million in 10 years
  • If you contribute $3,250 a month, you can save $1.5 million in 20 years
  • Contribute $1,495 a month, it will take you 30 years to earn $1.5 million
  • Contribute $755 a month, and it will take you 40 years to get $1.5 million into your retirement account

How Long to Save 1.5 Million For Retirement at 15% interest?

Maybe you’re a great investor and you think you can earn more than 6% interest on your investments. In fact, you think you can earn even more than 10% interest. 

What if you earned 15% on your investments? How long would it take to save $1.5 million for retirement earning 15% interest?

  • If you contribute $5,455 a month, you can save $1.5 million in 10 years
  • If you contribute $1,002 a month, you can save $1.5 million in 20 years
  • Contribute $217 a month, it will take you 30 years to earn $1.5 million
  • Contribute $49 a month, and it will take you 40 years to get $1.5 million into your retirement account

Related: How to Make 2 Million Dollars? (Realistically!)

Can you retire comfortably on 1.5 million dollars?Can You Retire on 1.5 Million Comfortably?

Over the course of my research, I’ve realized that $1 million dollars can be difficult to live on if you want a comfortable retirement. And, for most, $2 million is actually a bit too much.

So is $1.5 million the magic number for retirement? Can you retire on 1.5 million comfortably?

According to Bankrate’s saving withdrawal calculator, if you have 1.5 million dollars in retirement and you earn 6% interest on your money…

  • You can withdraw $100k a year and your money will last for 34 years
  • Or, you could withdraw $80k a year and be worth $2.7M in your 40th year of retirement 

Those options sound comfortable to me!

How Much Retirement Income Will $2 Million Generate?

Everyone is different. Even though $1.5 million might sound like the perfect retirement target to me, it might sound too low for you. 

Maybe you’re used to earning $150k a year and you don’t want to be limited to a $100k withdrawal in retirement. 

So what about $2 million? How much retirement income will $2 million generate?

  • If you withdraw $135k a year, your $2 million nest egg will last 32 years
  • If you spend slightly less and withdraw $120k a year, you’ll still have $1.3M after 40 years of retirement

To answer your question of “Can you retire on $2M?”…Yup, absolutely!

If $1.5 million in your retirement is too little, then perhaps $2 million is the right number for you!

Related: What Is The Interest On 2 Million Dollars? (…And Is It Right For You?)

Want to Learn More About Your Retirement Number? Use My Retirement Calculator!

There’s just no way any one article can provide you will all the various interest percentages and contribution dollar amounts you’re thinking of. So if you want to dig a little deeper and try out some numbers for yourself, I’d suggest you download my free retirement calculator to see how long your retirement dollars will last!

It’s a sleek looking tool, and it can really open your eyes and teach you about how your money will move in retirement. Be sure to download it and give the retirement calculator a try!

How to Save 1.5 Million For Retirement – Is This Your Target??

Now you basically know all there is to know about saving $1.5 million for retirement.

  • You know what I personally invest in (and what you might like to invest in as well)
  • You know what percentage you should expect to earn on your retirement dollars
  • And, you know how much you should contribute each month to reach your goal of $1.5 million

So now the question is, will you do it? Will you make $1.5 million your retirement goal? And will you start contributing what’s necessary to get there?

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AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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