Kiplinger’s Personal Finance — September 2017

09/2017 KIPLINGER’S PERSONAL FINANCE 33

ISTOCKPHOTO.COM (4)

YOU’VE SAVED

$63,000

• 
  

WHAT YOU NEED TO

SAVE PER MONTH

$1,250

YOU’VE SAVED

$100,000

WHAT YOU NEED TO

SAVE PER MONTH

$960

YOU’VE SAVED

$45,000

• 
  

WHAT YOU NEED TO

SAVE PER MONTH

$400

YOU’VE SAVED

$65,000

WHAT YOU NEED TO

SAVE PER MONTH

$250

YOU’VE SAVED

$0

WHAT YOU NEED TO

SAVE PER MONTH

$310

YOU’VE SAVED

$16,000

• 
  

WHAT YOU NEED TO

SAVE PER MONTH

$210

YOU’VE SAVED

$117,000

• 
  

WHAT YOU NEED TO

SAVE PER MONTH

$4,200

YOU’VE SAVED

$250,000

WHAT YOU NEED TO

SAVE PER MONTH

$2,750

Retire a Millionaire: Time Is on Your Side

Road to Riches

If you’re starting out and want to save $1 million by the time you

retire, time is on your side. Thanks to the miracle of compounding,

even modest monthly contributions can grow into a seven-figure

nest egg by the time you turn 65. Late bloomers can still reach the

magic number, but it will take a bigger chunk of your paycheck.

We’re assuming an all-stock portfolio with an 8% annual return—

less than the stock market’s historical average but slightly more than

some analysts expect the market to return over the next decade.

TIP: You may qualify for a tax

credit of 10% to 50% of the

amount you contribute to an

IRA, 401(k) or other retirement

account. The credit can reduce

your tax bill by up to $2,000.

To qualify, your income must be

$31,000 or less if you’re single,

$46,500 or less if you’re a head

of household, or $62,000 or less

if you’re married and file jointly.

TIP: Despite other demands on

your paycheck (such as a mort-

gage, contributions to college

savings and car loans), resolve

to contribute at least enough

to your 401(k) to capture your

employer’s matching contribu-

tion—that’s free money. Try to

save 15% of your gross income

for retirement, including your

employer match.

TIP: Use extra income to super-

charge your savings. You can

contribute up to $18,000 to

your 401(k) or similar employer-

sponsored plan this year, plus

an additional $6,000 if you’re

50 or older. You can also

contribute up to $5,500 to a

traditional or Roth IRA, plus an

additional $1,000 if you’re 50

or older.

TIP: Planning to work a few

years longer can boost your

savings. And because you won’t

be taking withdrawals, your

money will have more time to

compound and grow.

*MEDIAN AMOUNT SAVED FOR THE AGE GROUP.

SOURCE: TRANSAMERICA CENTER FOR RETIREMENT STUDIES 16TH ANNUAL RETIREMENT SURVEY OF WORKERS

AT AG E

25

AT AG E

35

AT AG E

45

AT AG E

55