Ideally, you’re going to want to be able to invest the maximum allowed into a retirement savings account the government will allow per year. I want you to save and invest at least 30-50% of your income. This is going to get you to retirement faster. Many financial personalities suggest you save and invest at least 10-15% of your monthly income.

What this means is that a 25-year old who invests 10% of his $20k annual salary in an S&P 500 Index fund for 40 years can possibly retire with $1.6 million. This is based on a past study of the average of all the 40-year returns of the S&P 500 since 1928 by investment professional Paul Merriman.

The most remarkable aspect of someone retiring in 40 years investing $173/mo and potentially earning $1.6 million is that your total contribution equates to about $83k or just 5% of your earnings! Over the span of 40 years you retired a millionaire and only came out-of-pocket $83k to get there! At the same time you give yourself options to have an additional savings account on the side, pay off your house, fund college for your kids, travel, donate to charities and so many other things you want to do. All the while you stayed diligent and saved just $173/mo. I really hope you all see that virtually anyone can do this.

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