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Do you dream of being a millionaire? Perhaps you’re already on your way, but you’re not sure when you’ll reach the million-dollar mark. That’s where a millionaire calculator comes in handy.
This interactive tool will tell you how long it’ll take you to save a million dollars.
How To Use the Calculator
A millionaire calculator is a helpful tool that calculates how many years you have before you reach a million dollars in savings. It tells you how much you need to save each month and factors in the amount you’ve already saved, the average rate of return on your investments and inflation.
To use this millionaire calculator, start by entering your current age and your millionaire target age. If you’re 40 and want to be a millionaire in 20 years, enter 60 as your target age.
Next, enter the amount of savings you currently have, the average interest rate you expect to earn on your investments and how much money you plan to save each month. It’s okay if you don’t know how much to save. The calculator will tell you at what age you’ll reach your million-dollar savings goal based on your contributions.
Finally, click “Calculate” to see a savings estimate and graph showing your balance over time. Click “View Report” for a summary of your savings plan along with suggested changes to your investing and monthly saving.
Terms Explained
Here are some of the most important terms to know when using the millionaire calculator.
Current Age
This is your age right now and the starting point for your savings plan.
Millionaire Target Age
This is the age you want to be when you reach $1 million in savings. It’s used to determine the rate at which you should be saving.
Current Investment Value
This is the combined total of your savings and retirement accounts.
Savings Per Month
This represents the amount of money you plan to save each month to reach $1 million.
Expected Rate of Return
This is the rate at which your savings or investments will grow each year. It varies depending on the type of investments you choose, market conditions and other factors.
An expected rate of return is not guaranteed. While historical data suggests the average stock market return is around 6% to 7% when adjusted for inflation, future performance is subject to market fluctuations, and returns can vary significantly from year to year.
This save-a-million-dollars calculator is intended to provide an estimate, not a guarantee, of how long it will take you to reach your goal. Changes in your rate of return will impact your millionaire timeline.
Expected Inflation Rate
The inflation rate measures the average rate at which prices increase for goods and services. It can affect the purchasing power of your savings, so it’s important to factor into your calculations.
The Federal Reserve sets a long-term inflation rate target of 2%, a modest goal rate that aims for economic stability and consumer well-being. The Consumer Price Index is a common measure of current inflation provided and updated by the U.S. Bureau of Labor Statistics.
How To Save a Million Dollars in 20 Years
To save a million dollars in 20 years, you’ll need to adjust your monthly savings for a timeline of 20 years from your current age. Your required monthly savings contributions depend on the following factors:
- Current savings. The more money you can put away now, the less you will need to save each month.
- Rate of return. The higher your rate of return, the faster your money will grow.
Both of these factors can have a significant impact on your savings plan and the amount you need to contribute each month to reach your goal. This table shows how your monthly savings goal can shift based on current savings.
| Current Savings | Inflation Rate | Annual Rate of Return | Monthly Savings Goal |
|---|---|---|---|
$0 | 3% | 7% | $1,959 |
$10,000 | 3% | 7% | $1,883 |
$100,000 | 3% | 7% | $1,201 |
Likewise, this table highlights how your monthly savings goal can change based on your rate of return (assuming $0 in current savings).
| Current Savings | Inflation Rate | Annual Rate of Return | Monthly Savings Goal |
|---|---|---|---|
$0 | 3% | 5% | $2,454 |
$0 | 3% | 7% | $1,959 |
$0 | 3% | 9% | $1,554 |
Contributing more to your savings upfront and choosing investments that earn a greater return can make it easier to save a million dollars in 20 years. However, note that higher rates of return are typically associated with greater risk.
How To Save a Million Dollars in Five Years
Saving a million dollars in five years requires an aggressive savings plan.
Suppose you’re starting from scratch and have no savings. You’d need to invest around $13,000 per month to save a million dollars in five years, assuming a 7% annual rate of return and 3% inflation rate. For a rate of return of 5%, you’d need to save around $14,700 per month.
As the table below illustrates, you could achieve your goal with a lot less saved per month if you already have a chunk of money saved up.
| Current Savings | Inflation Rate | Annual Rate of Return | Monthly Savings Goal |
|---|---|---|---|
$0 | 3% | 7% | $12,987 |
$100,000 | 3% | 7% | $12,008 |
$300,000 | 3% | 7% | $8,090 |
$500,000 | 3% | 7% | $4,172 |
How To Save a Million Dollars
Whether you want to become a millionaire in five, 20 or 30 years, you need to know how to save money.
Here are some steps you can take to start your journey toward becoming a millionaire.
- Make a budget and track your expenses. Budgeting and tracking your spending can help you identify areas where you can cut back and direct more income to savings.
- Increase your income. Start a side hustle or ask for a raise at work to bring more money in. The more you earn, the more you can save.
- Maximize your retirement savings. Contribute the maximum amount to your 401(k) and/or IRA each year.
- Invest wisely. Diversify your portfolio with a variety of investments and avoid unnecessary fees.
- Use a millionaire calculator. Track your progress and adjust your savings plan.
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Frequently Asked Questions (FAQs)
What is a millionaire calculator?
A millionaire calculator is a financial tool that calculates when you will save $1 million based on the amount of money you have saved now, the interest rate you’re earning and how much you contribute each month. It shows you how old you’ll be when you reach your goal.
When will I be a millionaire?
Several factors can impact how long it will take you to become a millionaire. If you’re not getting there as quickly as you’d like, consider looking for ways to increase your monthly contribution and/or the rate of return on your investments. The more money you can contribute each month and the higher your rate of return, the faster you’ll reach your goal.
Are millionaire calculators accurate?
Millionaire calculators provide a general estimate of when you might reach $1 million in savings, but they’re not always accurate for everyone. Work with a financial advisor to create a personalized savings plan that considers your unique needs and goals.
