If you are able to max out your 401(k) at $15,500 and your Roth IRA at $5,000 for only a single year anytime before you are the age of 26 and can earn 10% annually, the historical average rate of return, then you will end up with over $1 million by the time you are 67 even if you never contribute a single penny ever again. [Source: MotleyFool.com]
If you are over the age of 26, don’t fret, you can be as seasoned as 52 and still reach one million by 67 but it will take a lot more work. The article outlines an entire table detailing how many consecutive years of maxing out your funds it will take to reach $1 million by 67 and the numbers aren’t as daunting as you may think.
For 52 year olds starting with $0, you will have to contribute the maximum for 15 consecutive years in order to see $1M. The prospect for a 42 year old is much better, a mere six years of maximum contributions will get you there. If you’re 32, only two years of maximum contributions will get you to $1M by the time you are 67. After 52, unfortunately you can’t reach $1M through contributions and 10% growth… but if you’re 53 now and have zero contributions, you can at least depend on the fact that Social Security will still be solvent and you likely have a pension. Those two comforts will likely not exist for those folks in their 20s!