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How Much Do I Need to Save to Get to My "Number?"

By: Austin Colby, CFP®, MBA


On any given day, you can turn on your television and see a variety of commercials that ultimately ask you, “What is your NUMBER?” 

The commercials are referencing the number you need saved for retirement, or financial freedom, or some other finishing point.  

To arrive at that is actually quite a complex set of formulas, Monte Carlo simulations and a whole bunch of assumptions about what you want your future life to look like.

But, it is very easy to figure out what you need to do tomorrow to reach a certain dollar amount in your future investment portfolio.

We will be doing that fun math exercise today.

All investment returns are assumed to be 8% per year.  That would be a high-stock portfolio return over a long period of time, historically.

We are assuming the investor begins saving at either age 25, 35 or 45 and wants to achieve the final dollar amount by age 60.

The dollar amounts shown next to the end portfolio value represent the amount needed to invest each month to reach that final number.

Let’s see what this might look like…


$500,000

  • Age 25: $218/month

  • Total savings of $91,560

  • Age 35: $526/month

  • Total savings of $157,800

  • Age 45: $1,445/month

  • Total savings of $260,100

_____________________________________________________________________________________________________________________________________________________

$1,000,000

  • Age 25: $436/month

  • Total savings of $183,120

  • Age 35: $1,051/month

  • Total savings of $315,300

  • Age 45: $2,890/month

  • Total savings of $520,200

_____________________________________________________________________________________________________________________________________________________

$2,000,000

  • Age 25: $872/month

    • Total savings of $366,240

    • Age 35: $2,103/month

      • Total savings of $630,900

    • Age 45: $5,780/month

      • Total savings of $1,040,400


So what should you focus on?  Start early, save often, and let your money do the hard work of compounding for you.

Because The Wealth Group, Austin B. Colby & Associates is independent of Raymond James, the expressed written opinions above are our own and not necessarily reflective of Raymond James’ opinions.