Want $1 Million by Retirement? Here's How Much You Should Invest Today
A good target for retirement is $1 million. That can give you a good nest egg to pull money out of as you need, or you can invest it into high-yielding dividend stocks or a diverse exchange-traded fund that brings you recurring income. But just how much do you need to invest to get to $1 million realistically? That depends mainly on two things: First, what growth rate you expect your investments to grow at, and second, how many investing years you have left.
A realistic long-term target for investors may be the S&P 500's average, which is around 10% per year when including dividends. Over the past decade, the index's total returns (including dividends) have been about 240%. Focusing on growth stocks can be a way to outperform the index; for example, drugmaker Eli Lilly, and managed healthcare company UnitedHealth Group, have dwarfed those numbers with total returns of 875% and 1,000%, respectively, during that same period.
Source Fool.com