Here's the Truth About How Much You Need to Save If You Want to End Up a Millionaire

Key Points Many people believe they need at least $1 million for a secure retirement. This is possible, but it depends on how much you earn and when you start. You need to set specific savings goals and automate the process. The $23,760 Social Security bonus most retirees completely overlook › If you retire with $1 million, your nest egg should safely be able to produce somewhere around $40,000 in income for your first year of retirement, with withdrawals adjusted in subsequent years to account for inflation. That's based on the 4% rule, a common rule of thumb for setting a safe withdrawal rate. Many people set the goal of saving $1 million for retirement because it's a simple number to work toward. But is it actually a realistic goal? How much would you have to save to hit the target? Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Image source: Getty Images. This is the amount you must save to have a $1 million nest egg If you want to end up with $1 million at retirement, you'll likely need to save consistently throughout your entire career in order to make that feasible. The specific amount, however, will vary depending on when you start saving and the returns you expect to earn. The table below shows the different monthly amounts you will need to invest to reach $1 million by age 67, which is the full retirement age for Social Security for anyone who was born in 1960 or later. It assumes that you will earn a 10% average annual return, which is a reasonable assumption for many retirement savers based on the historical returns provided by the S&P 500 . If you start investing at this age You must save this much per month 20 $95.57 30 $252.50 40 $688.14 50 $2,055.34 60 $8,783.79 Table calculations by author. While starting early obviously makes amassing seven figures considerably easier, even if you don't get started until you are 40, maxing out an IRA alone would come close to enough to get you to that $1 million goal. Of course, if you wait until your 50s and 60s, you'll have to invest much more aggressively or delay retirement to give yourself some extra years of savings. Start early and automate your investments If retiring a millionaire is your goal, the key is not to wait. Even if you can't put a lot of money in your retirement plans today, starting with something can help you get on the right path. You'll also want to try to automate your investments as much as you can, as doing so would mean you are much less likely to miss a contribution. It's also worth asking if $1 million is really enough. If you're in your 20s today, inflation is going to eat away at the buying power of that million, so you'll likely want to try for more. Think about what your final salary is going to look like, set a goal based on replacing around 80% of it, and start working toward hitting that goal today. If you do that, you'll maximize the chances of making millionaire status a reality. The $23,760 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more ... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies. View the "Social Security secrets" » The Motley Fool has a disclosure policy .

Many people believe they need at least $1 million for a secure retirement.

This is possible, but it depends on how much you earn and when you start.

You need to set specific savings goals and automate the process.

If you retire with $1 million, your nest egg should safely be able to produce somewhere around $40,000 in income for your first year of retirement, with withdrawals adjusted in subsequent years to account for inflation. That's based on the 4% rule, a common rule of thumb for setting a safe withdrawal rate.

Many people set the goal of saving $1 million for retirement because it's a simple number to work toward. But is it actually a realistic goal? How much would you have to save to hit the target?

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

If you want to end up with $1 million at retirement, you'll likely need to save consistently throughout your entire career in order to make that feasible. The specific amount, however, will vary depending on when you start saving and the returns you expect to earn.