Save and Invest

Here's how much you need to put in your 401(k) every month to retire with $1 million

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Twenty20

Experts often recommend saving up $1 million before you retire. But what does it really take to achieve that goal?

CNBC calculated how much you need to put into your 401(k) each month in order to reach $1 million by age 65, depending on when you start saving. Most financial planners suggest you save anywhere between 10 and 15% of your gross salary, so CNBC also calculated the salary you'd need to earn in order to save $1 million without putting away more than 15% of your income.

It's worth noting that 401(k) plans come with contribution limits: In 2019, you can put up to $19,000 in your account, up from $18,500 in 2018. We looked at different rates of return on your investment, but it's impossible to predict future market returns — investing in your 401(k) is a long-term plan, and you should expect to weather some ups and downs in the market. These calculations don't take into account the many ups and downs people experience over their lives, including pay increases, periods of unemployment and sudden financial windfalls or losses. Still it's helpful to get even the most basic sense of what you should be saving to enjoy a seven-figure retirement.

Investing your savings is powerful thanks to compound interest, which is when any interest earned then accrues interest on itself. The earlier you're able to start socking money away, the bigger the boost the stock market will give you. If you start at 25, you could potentially hit a million by 65 by saving around $250 every month for 40 years, which is around $8 a day.

Here's how much you need to save each month to hit seven figures by the time you retire.

If you start at age 25:

With a 4% rate of return: $843.24 per month

  • Annual salary needed if you save 10% of your income: $101,189
  • Annual salary needed if you save 15% of your income: $67,459

With a 6% rate of return: $499.64 per month

  • Annual salary needed if you save 10% of your income: $59,957
  • Annual salary needed if you save 15% of your income: $39,971

With an 8% rate of return: $284.55 per month

  • Annual salary needed if you save 10% of your income: $34,146
  • Annual salary needed if you save 15% of your income: $22,764

If you start at age 30:

With a 4% rate of return: $1,090.78 per month

  • Annual salary needed if you save 10% of your income: $130,893
  • Annual salary needed if you save 15% of your income: $87,262

With a 6% rate of return: $698.41 per month

  • Annual salary needed if you save 10% of your income: $83,809
  • Annual salary needed if you save 15% of your income: $55,872

With an 8% rate of return: $433.06 per month

  • Annual salary needed if you save 10% of your income: $51,967
  • Annual salary needed if you save 15% of your income: $34,644

If you start at age 40:

With a 4% rate of return: $1,938.57 per month (exceeds the $19,000 annual limit)

  • Annual salary needed if you save 10% of your income: $232,629
  • Annual salary needed if you save 15% of your income: $155,086

With a 6% rate of return: $1,435.83 per month

  • Annual salary needed if you save 10% of your income: $172,300
  • Annual salary needed if you save 15% of your income: $114,867

With an 8% rate of return: $1,044.53 per month

  • Annual salary needed if you save 10% of your income: $125,344
  • Annual salary needed if you save 15% of your income: $83,563
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Of course, saving hundreds or thousands a month is an ambitious goal. Even if you aren't able to put in that much every month, you should aim to contribute enough to earn any match your employer offers. It's essentially free money: When companies offer a 401(k) match, they agree to kick in whatever contribution you make up to a certain amount, so if your employer offers a 5% match, and you contribute 5% of your salary, the equivalent of 10% of your salary goes into the tax-advantaged account.

This year, the average employer 401(k) match is 4.7%, according to Fidelity, which manages more than 30 million retirement accounts. That's a record high, the company tells CNBC Make It.

If your company doesn't offer a 401(k) or comparable plan, you can still save for the future. Consider other retirement savings vehicles that offer tax benefits, such as a Roth IRA, traditional IRA and/or a health savings account.

Here are a few tips to get you started:

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