My Retirement Blog

Need to know how much to save in order to retire a millionaire at the age of 65? Kiplingers has a whole slew of numbers to give you some confidence that you’re either on the right track or not that far away. The only assumptions they make are that you earn 8% annually on your money and that you don’t bet it all on black when you’re 64 and 11 months (okay, I may have made that last one up).

If you’re 25, to get to a cool million it only takes $286 a month. If you start at 35, you’ll need $671 a month to get to a million. At 45, you have a little tougher going but you’ll need $1,698 per month. If you’re 55, have nothing saved, you’ll need $5,466 saved per month in order to reach a million in ten years.

Some of the advice they give is pretty standard, such as contributing to a 401K if your employer offers a match, work a couple years longer past the traditional 65 retirement age, and contribute the max to your retirement accounts.

Source: Kiplingers

The Roth IRA contribution limits are:

As you can see, if you’re over 50 then you’re given a “catch-up” contribution.

The income phaseout schedule is based on your modified adjusted gross income, which is your income minus some deductions. The income phaseout schedule is:

The phaseout is linear, so if you are single then at $95,000 then you could contribute $4,000 in 2006. If you made $110,000 then your contribution is $0. If you made $100,000, then your contribution would be limited to $1333.33.

One little known fact: If you’re under the income ceiling, your phaseout’s minimum contribution is $200. So, if your MAGI were $109,999, your contribution limit is $200, not some miniscule proportionate number.