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How Much Can You Save in a Lifetime?

By JLP | May 30, 2006

FEATURED CALCULATOR: LifetimeSavings

I guess the proper answer for that question is “who knows!” The reason for this is that there are so many variables in life that it makes it difficult to come up with an answer. That said, I think it is still a good idea to try to answer this question for yourself. Why? Because I think it can put you on the right path for saving for the future. Too many people try to turn a blind eye to retirement planning because it seems so far off and would rather spend their hard-earned money on nice cars and clothes and anything else that doesn’t retain its value.

If a young person aged 25 started out in a career and committed to saving 10% of their earnings over their lifetime and those savings grew at 10% per year, it is possible that they could have over $2,000,000 by the time they reached 65. If they were fortunate enough to have a company that matched 3%, they could have over $2.7 million by the time they reached retirement. Don’t believe me, try it out for yourself with my latest calculator, LifetimeSavings, which will let you customize the calculator for your needs. Give it a try and tell me what you think.

This is why it is sooooo important to get started saving for retirement AS SOON AS POSSIBLE.

Topics: 401(k), Calculators, Financial Planning, Retirement Planning | 5 Comments »


5 Responses to “How Much Can You Save in a Lifetime?”

  1. Dus10 Says:
    May 31st, 2006 at 7:17 am

    That is a wonderful calculator… it sure beats creating a new one in Excel every time I get an itch. I am in a unique situation, in that my employer match is huge. They match my first 3% dollar-for-dollar, my next 2% 50-cents-per-dollar, contribute an 8% lump sum annually, and an optional 2% lump sum annually (that board has always approved)… for a total of 19% of my salary. Further, I am 25, just like your example… but since I started working in my career at 18, I have a nice headstart on the salary mark… if I did this for 40 years, I would almost have $6.4M!!!

  2. Anonymous Says:
    May 31st, 2006 at 1:13 pm

    I prefer to think in terms of net worth. I’ve taken some actions this year that were neutral regarding my net worth at the time, but actually depleted my savings, paying off several debts. In the long run, those actions are going to help me.

  3. Anonymous Says:
    May 31st, 2006 at 1:17 pm

    It can be fun to watch for certain milestones. For example, when do your savings start growing faster than your contributions to it? At what point do your savings start growing by more than your income each year? Or the one I want to see is when my savings are growing more each year than the sum of my income and the amount I saved that year. The final one will be when my savings are growing at more than double my income each year. At that point, I will be able to withdraw an amount equal to my income without spending my principle.

  4. Bob Jordan Says:
    July 8th, 2006 at 3:02 pm

    401(k) prospective at my current age 66, “brass tacks $ $ $”

    I retired at age 46(1986) and prices for: Milk $1.05 gal. now $3.25 gal, Gasoline $.85 gal. now $2.85 gal., and a real estate tax bill $934 now $3800. The point… 3 times the price at least on virtually everything. THUS THE NEED IS….3X in retirement so far 1 year after age 65 to live daily.

    I have yet to meet or hear of one millionaire who ever had a 401(k)… think about this. IRA’s etc. started in the 1970’s
    ,,, a poor investment then as now. Why… fees and income taxes on the take out in retirement kills the ‘future value’ (Think 1 out of every 3 dollars recieved to fees and income taxes.) Now add inflation… put in a $1 in 1986, it needs to be at least $3 in 2006 plus another $1.33 for fees and taxes on this money recieved, thus $4.33 total.

    I have yet to meet any retiree who can come close to a 4.33 to 1 gain…none!

  5. Learn Stock Says:
    February 23rd, 2009 at 8:35 pm

    Yes saving can help build million of dollars when you reach the age of 65, but during that time we may also need to take out our savings for urgent need or solving financial problems.

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