Can you accumulate $1 million for retirement?


Like many people, you’ve probably made investment goals – but will you be able to reach them? 

Say, for example, that you have determined that you would like to have $1 million in your investment portfolio by the time you retire. Will you be able to get there? 

In trying to accumulate $1 million – or any other amount – you should generally begin by considering how much you have saved now, how much you can contribute in the future, how much you might earn on your investments, and how long you have to accumulate funds.

Your current balance is your starting point – the more you have today, the less you’ll need to contribute to your investment portfolio or earn on your investments to meet your goal. 

Likewise, in general, the longer the time you have to save, the greater the opportunity you have to accumulate $1 million. If you have a sufficiently long time and a sufficiently large current balance, with adequate earnings you might be able to reach your goal without making any additional contributions. With a longer time horizon, you’ll also have more time to recover if the value of your investments drops. If additional contributions are required to help you reach your goal, the more time you have to target your goal, the less you may have to contribute. 

The key point here is the sooner you start making contributions, the better. If you wait too long and the time remaining to accumulate funds becomes too short, you might not be able to make the large contributions required to reach your goal. In such a case, you might consider extending the accumulation period, perhaps by delaying retirement.

Another important factor in reaching your goal is the rate of return. In general, the greater the rate of return that you earn on your investments, the more likely that you’ll reach your investment goals. The greater the proportion of the investment portfolio that comes from earnings, the less you may need to contribute to the portfolio. Earnings generally benefit from longer time frames and compound rates of return, since returns are earned on any earlier earnings. 

However, higher rates of return are generally associated with greater risk and the possibility of investment losses. It’s important to choose investments that meet your time horizon and tolerance for risk. And be realistic in your assumptions. What rate of return is realistic given your current asset allocation and investment selection?

Of course, the more you can regularly contribute to your investment portfolio (e.g., monthly or yearly), the better your chances of reaching your $1 million investment goal, especially if you start contributing early and have a long time horizon. 

Now that the primary factors that affect your chances of getting to $1 million have been reviewed, use the chart above to see several scenarios of how much you would need to save each year to reach the $1 million target. 

Note:  This hypothetical example is not intended to reflect the actual performance of any investment. Actual results may vary. Taxes, fees, expenses, and inflation are not considered and would reduce the performance shown if they were included.

BARBARA KENERSON is first vice president/Investments at Janney Montgomery Scott LLC and can be reached at

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