A $1 million target is a great goal for your investment portfolio. If you reach that total by retirement, you'll have plenty of options by your side. For example, you could withdraw the money slowly for daily use. Additionally, you can invest some of it back in dividend stocks that generate a steady stream of cash to pad any retirement income you may have.

Knowing how much you need to invest and having realistic expectations is important, however. Ideally, you'll start investing as early as possible. But if you can't, you can make up for that lost time by saving more and investing more money in later years.

There are three variables to consider when investing in stocks: your average annual return, how much you invest, and the number of investing years you have left. If you assume you'll average a 10% return, which is the S&P 500's long-term average, then you can solve for the other variables. Assuming a retirement age of 65 years, here's a look at how much you would need to invest based on a 10% annual return.

Continue reading

Source Fool.com