Key Points
- Saving about $381 a month from age 25 and earning 7% a year reaches $1 million by 65. Start at 35 and it takes $820 a month.
- A $50,000 earner who puts 6% into a 401(k) and gets the most common employer match invests $375 a month, enough to reach about $984,000 in 40 years at 7%.
- $1 million in 40 years won't buy what $1 million buys today. At 3% inflation, it has the buying power of about $307,000 in today's dollars.
Sorry, this isn't going to be a get rich quick post, but I do want to show you how to make $1,000,000 and have that nest egg for when you retire.
I'm a firm believer that people at most income levels can save and invest their way to $1,000,000 by retirement. When I first wrote this post in 2012, the math surprised me, and the numbers have held up since. Rerunning them with today's 401(k) limits and match data, the goal looks more reachable than it did then, because the way compound interest works hasn't changed.
However, by following the rules in this post, I exceeded that milestone less than 8 years later.
Below are simulations at different returns and starting ages, followed by the strategies and accounts that get you there. If you want to plug in your own numbers, use our millionaire calculator in How To Become A Millionaire At Any Age.
Math To Save And Make $1,000,000
To reach $1,000,000 by 65, you need to save about $381 a month starting at 25 if your investments earn 7% a year. At 5%, it's about $655 a month. At 8%, it's about $286. Those numbers assume you start from $0 and add the same amount every month, the slow-and-steady approach behind the penny that doubles every day.
The Goal: $1,000,000
Time Frame: I'm assuming you're 25 and will save until 65, so 40 years. The table covers later starting ages too, since most people reading this didn't start at 25. If that's you, our investing in your 30s breakdown picks up from there.
Rate of Return: When I first ran this, I used two scenarios, 5% and 8%. Everyone quotes 8% or more because that's been the historical norm for stocks, but for retirement planning I'd rather be a bit conservative. This update adds 7%, which is the number I'd plan with today, and 10%, which is close to the long-run stock market average covered in our index fund explainer.
Scenario 1: 5% Annual Return
If you want to save $1,000,000 at a 5% annual return, you need to save about $655 a month for 40 years. That gets you to $991,913 at $650 a month, which is the figure I originally used. A 5% return is roughly what a balanced portfolio of stocks and bonds might earn after fees in a weak decade.
Scenario 2: 8% Annual Return
If you want to save $1,000,000 at an 8% annual return, you need to save about $286 a month for 40 years. My original round number, $300 a month, gets you to about $1,047,000. That's close to what the stock market has returned over 40-year stretches, which the next section covers.
Scenario 3: 7% Annual Return (The Planning Number)
At 7%, the monthly savings needed is $381 from age 25, $820 from 35, $1,920 from 45, and $5,778 from 55. The full table shows every combination. If your own number looks out of reach, How To Start Investing With $100 Or Less shows how to begin smaller and scale up.
| Start Saving At | 5% Return | 7% Return | 8% Return | 10% Return |
|---|---|---|---|---|
| Age 25 (40 Years) | $655 | $381 | $286 | $158 |
| Age 35 (30 Years) | $1,202 | $820 | $671 | $442 |
| Age 45 (20 Years) | $2,433 | $1,920 | $1,698 | $1,317 |
| Age 55 (10 Years) | $6,440 | $5,778 | $5,466 | $4,882 |
What Rate Of Return Should You Plan For?
Plan with 7% for a stock-heavy portfolio, and treat anything above that as a bonus. The S&P 500, including dividends, returned about 10.0% a year from 1928 through 2025, based on NYU Stern professor Aswath Damodaran's annual return data. Using 7% leaves room for fees, a portfolio that isn't 100% stocks, and bad timing. Our Rule Of 72 explainer shows how fast money doubles at each rate.
Long periods smooth out a lot. Using the same Damodaran data, the worst 40-year stretch for the S&P 500 since 1928 (1929 through 1968, which starts with the crash) still averaged about 8.5% a year. The best (1950 through 1989) averaged about 12.5%. Past returns don't guarantee future ones, which is why a low-cost index fund and a conservative planning rate beat chasing a higher number.
A 3-point difference in returns changes the result dramatically over 40 years: $655 a month at 5% vs. $286 at 8%. As you get closer to retirement and have a real track record, recalculate with your portfolio's actual return every year or so. The best retirement calculators make that easy.
What Waiting 10 Years Costs You
Waiting from 25 to 35 more than doubles the monthly savings you need, from $381 to $820 at 7%. The 25-year-old contributes $182,880 over 40 years, while the 35-year-old puts in $295,200 over 30 years to end at the same $1 million. Someone who starts at 45 needs $1,920 a month and contributes $460,800. This is the same math behind the penny doubling for 30 days: the last stretch of compounding does the heavy lifting.
Put another way, $381 a month started at 35 instead of 25 grows to about $465,000 by 65 at 7%, less than half the goal. If you're already past 25, don't let that number stop you. Use it to pick a monthly amount that fits, and see our order of operations for retirement saving to decide where the money goes.
How To Get There
The monthly number matters more than the strategy, and most people can hit it with some mix of an employer plan, an IRA, and extra income. In the 7% scenario, you need about $4,572 a year starting at 25. Here are three ways to get there, starting with the millionaire-next-door approach.
Slow And Steady Investing Over Time
This isn't a sexy way to do it, but it works. In fact, the millionaire next door can prove it.
Start by taking full advantage of your employer's retirement plan. The most common 401(k) match in Vanguard plans is $0.50 for every dollar you put in, up to 6% of pay, according to Vanguard's How America Saves 2026. If you earn $50,000 a year and contribute 6%, you put in $3,000 and your employer adds $1,500. Our rundown of 401(k) contribution limits and rules covers how much you and your employer can put in.
That $4,500 a year is $375 a month going in, nearly the $381 the 7% scenario calls for. Over 40 years at 7%, it grows to about $984,000. A $50,000 earner who contributes enough to get the full match is within $6 a month of the goal, and raises along the way close it. Our list of 15 ways to save an extra $500 per month has plenty of options.
Plenty of savers are already there. Fidelity counted 769,000 401(k) millionaires at the end of June 2026, up from 654,000 a quarter earlier, with an average 401(k) balance of $155,800, according to Yahoo Finance's report on Fidelity's data. Fidelity's Q2 2026 retirement analysis put the average total 401(k) savings rate at a record 14.4%, and 81% of participants got their full employer match. If you're not one of them, fixing that is the fastest raise you'll get, and it's step one in our retirement savings order of operations.
The 2026 contribution limits give you far more room than this goal needs: you can defer up to $24,500 into a 401(k) and put $7,500 into an IRA, per the IRS. Max out a 401(k) at $24,500 a year and you'd reach $1 million in about 20 years at 7%, while maxing out only an IRA at $7,500 a year for 40 years and you'd have about $1.64 million. Our ranking of the best IRA accounts covers where to open one.
As your portfolio grows and you reinvest dividends, the gap closes faster because returns start doing more of the work than your deposits, the pattern our Rule Of 72 chart shows. If you don't know where to start, check out our series of articles by age:
- How To Get Started Investing In College
- How To Get Started Investing In Your 20s
- How To Get Started Investing In Your 30s
Before you invest, make sure you have an emergency fund so a car repair doesn't force you to sell investments or stop contributing. Keep it in a high-yield savings account, not in the market.
Invest In Real Estate
Real estate is another path to $1,000,000. There are a lot of ways to invest in real estate, and some of them don't take much money up front.
When you're in your 20s without much cash, owning property can seem like a pipe dream. Investing in real estate requires money, and fresh out of college, most people don't have a lot of it. House hacking and REIT index funds are two of the lower-cost ways in, covered in our list of 19 ways to invest in real estate.
Crowdfunding platforms let you buy into larger real estate deals with a few thousand dollars. Compare current platforms, minimums, and fees in our ranking of the best crowdfunded real estate platforms.
If you'd rather own a single-family rental, you can buy one with tenants already in place through online marketplaces. Roofstock built its business on this, though the company now focuses more on institutional buyers and property management, so read our Roofstock review before you start. Money you might need within five years doesn't belong in an illiquid real estate deal. Keep it in a high-yield savings account instead.
Start A Business
Starting a business is another way to reach $1,000,000. It's how the people who became millionaires by 25 did it. You don't have to launch a mega-firm to build a million-dollar business.
Plenty of bloggers, YouTubers, and side hustlers have turned their interests into million-dollar businesses. Most started small, with a few hundred dollars a month of extra income. Our ranking of the best side hustles sorts options by earnings and flexibility.
If you don't know where to start, look at our list of side hustle ideas. These are good starting points to earn more money, even on the side, to help you reach your goal.
Remember, at 25 you only need about $381 a month at 7%. A side income that covers that frees your paycheck for everything else. If you earn more, invest the difference and reach the goal faster, or build toward passive income streams that keep paying after the hustle stops.
What Will $1 Million Be Worth When You Get There?
$1 million 40 years from now will buy much less than $1 million buys today. At 3% annual inflation, $1 million in 2066 has the buying power of about $307,000 in today's dollars. To match today's $1 million in purchasing power, you'd need about $3.26 million in 40 years. Run your own scenarios with our inflation calculator.
That doesn't make the goal wrong, but it does make $1 million a milestone rather than a finish line. A common planning rule is to withdraw about 4% of your portfolio in the first year of retirement, which is $40,000 from $1 million. Whether that's enough depends on your expenses, Social Security, and when you retire. Check where you stand against how much you should have saved for retirement by age.
The fix for inflation is simple: raise your contributions as your pay rises. If your monthly savings grow with your income, your balance keeps up with prices. See how your peers compare in average net worth of millennials by age.
Important Tax Reminder
Decide whether your $1,000,000 is before or after taxes, because it changes how much you can spend. Money in a traditional 401(k) or IRA goes in pre-tax and is taxed as income when you withdraw it, while Roth 401(k) and Roth IRA money goes in after tax and comes out tax-free in retirement. Our Roth vs. traditional IRA decision tree walks through which fits you.
Most savers end up with a mix, and that's fine. Many employers put the match into a traditional account even when you choose Roth for your own contributions. Roth IRA contributions phase out between $153,000 and $168,000 of income for single filers in 2026, and between $242,000 and $252,000 for married couples filing jointly, according to the IRS. For more on planning the whole path, see how to save $1,000,000.
If you want to retire before 65, you'll likely need a taxable brokerage account alongside your retirement accounts, since most early withdrawals from a 401(k) or IRA before 59½ carry a 10% penalty. Our retirement order of operations explains when a taxable account makes sense.
Frequently Asked Questions
How Much Do I Need To Save Per Month To Become A Millionaire?
At a 7% annual return, you need about $381 a month starting at 25, $820 starting at 35, $1,920 starting at 45, or $5,778 starting at 55 to reach $1 million by 65. The table above shows the amounts at 5%, 8%, and 10%. Our millionaire calculator lets you plug in your own age and balance.
How Long Does It Take To Save $1 Million If I Max Out My 401(k)?
Contributing the 2026 maximum of $24,500 a year to a 401(k) and earning 7% gets you to about $1 million in roughly 20 years, starting from $0. An employer match shortens that. See the order of operations for saving for retirement for what to fund first.
Can You Become A Millionaire On A $50,000 Salary?
Yes. Contributing 6% of a $50,000 salary with the most common employer match ($0.50 per dollar up to 6%) puts $375 a month into a 401(k), which grows to about $984,000 in 40 years at 7%. Raises along the way close the gap. Our 15 ways to save $500 a month can help find the rest.
Is $1 Million Enough To Retire?
$1 million supports about $40,000 a year in first-year withdrawals using the common 4% planning rule. In 40 years, at 3% inflation, $1 million buys what about $307,000 buys today, so many people will need more. Compare your progress with how much you should have saved for retirement by age.
How Many People Have $1 Million In Their 401(k)?
Fidelity counted 769,000 401(k) millionaires on its platform at the end of June 2026, up from 654,000 the prior quarter. That's only Fidelity's accounts, so the national number is higher. Our best IRA accounts ranking covers where to save beyond a 401(k).
What Rate Of Return Should I Use To Plan For $1 Million?
Use 7% for a stock-heavy portfolio. The S&P 500 returned about 10% a year from 1928 through 2025 including dividends, and its worst 40-year stretch still averaged about 8.5%, but fees, bonds, and inflation pull real-world results lower. Our Rule Of 72 explainer shows what each rate means for doubling time.
Final Thoughts
Making $1,000,000 doesn't take a windfall. It takes a monthly number, an account to put it in, and enough years. Start with your employer match, add an IRA, and use side income to cover any gap. The earlier you start, the less each month costs, as the compound interest math shows.
Readers, what are your thoughts? Do you think most people can save $1,000,000 if they tried?
Editor: Clint Proctor Reviewed by: Chris Muller
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.