A Reddit post outlines essential investment figures necessary at various ages to reach a retirement goal of $1.2 million by age 67, utilizing compound growth. For instance, investing $39,500 at age 18 at a 7% annual return can ensure reaching this target without further contributions thereafter. This capital allows retirees to withdraw about $48,000 yearly based on the 4% rule. The post additionally provides a formula to adjust the target savings based on differing annual expenses, highlighting the critical importance of early and effective investing for long-term wealth management.
At age 18, you need $39,500 invested to reach $1.2 million by 67, given a 7% return allowing wealth to grow independently.
Investing early allows your money to compound effectively, ensuring that by retirement age you can sustain your desired lifestyle without further contributions.
The 4% rule indicates that $1.2 million can yield $48,000 annually in retirement, emphasizing the importance of strategic early savings.
Depending on desired retirement spending, adjust your target savings by proportionately calculating based on annual expenses compared to $48,000.
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