Want to save $1 million in 10 years? SmartAsset’s savings calculator estimates that you need to save $7,900 per month in a high-yield savings account with an average APY of 1.10%. If you start at 30, the amount remains the same, but if you start at 40, it increases to $19,000 per month. To maximize savings, consider investing in stocks, mutual funds, or real estate, and take advantage of employer-sponsored retirement plans.
In order to hit your goal of $1 million in 10 years, how much do you need to save each month?
If you’re like most people, the idea of having a million dollars in your bank account is a dream come true. But how do you achieve this goal in just 10 years? According to SmartAsset’s savings calculator, you would need to save around $7,900 per month to reach this milestone. This is assuming you’re putting your money into a high-yield savings account with an average annual percentage yield (APY) of 1.10%.
Breaking down the numbers
Saving almost $8,000 per month may seem daunting, but let’s break down the numbers. If you’re earning a salary of $200,000 per year, this means you need to save around 50% of your income each month. This may sound like a lot, but it’s not impossible. By cutting down on unnecessary expenses and living below your means, you can free up more money to put towards your savings.
While a high-yield savings account is a safe option for saving your money, it may not be the most profitable. Investing your money in stocks, mutual funds, or real estate can yield higher returns, but also come with higher risks. It’s important to do your research and consult with a financial advisor before making any investment decisions.
The earlier you start saving, the easier it will be to reach your goal of $1 million in 10 years. By starting at age 30, you would need to save around $7,900 per month. But if you wait until age 40, you would need to save around $19,000 per month to reach the same goal. This is why it’s important to start saving as early as possible, even if it’s just a small amount each month.
Maximizing your savings
In addition to cutting down on expenses and investing your money wisely, there are other ways to maximize your savings. One option is to take advantage of employer-sponsored retirement plans, such as a 401(k) or IRA. These plans allow you to save pre-tax dollars, which can lower your taxable income and increase your savings. Another option is to earn extra income through side hustles or freelance work.
Saving $1 million in 10 years may seem like an impossible feat, but it’s achievable with the right strategies and mindset. By saving around $7,900 per month and investing your money wisely, you can reach this milestone and achieve financial freedom. Remember to start early, cut down on expenses, and maximize your savings to reach your goal faster.
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