Have you put any money toward your retirement yet? Sometimes people think that investing is something that’s done only by those who are rich. However, when it comes to investing in the market, how early you start can be just as important as how much you invest. In fact, because of the power of compound interest, starting to invest as early as possible with whatever money you can spare can put you ahead of richer investors who start later.
Learn More: I’m an Investor: I’m Making These Money Moves Immediately If Trump Wins
Find Out: 7 Reasons Future Retirees Should Consider a Financial Advisor
Here’s how much money you’ll have for retirement if you start investing just $1, $5 or $10 every day.
Investing $1 Every Day
A dollar might not seem like a lot of money to invest, but every little bit can add up. Over the years, as you continue to deposit money into your retirement account and your investments grow in value, you can end up accumulating a sizable nest egg.
Here’s how much you’ll have for retirement if you start investing a dollar a day, based on your current age.
Note: These calculations are based on investing in the S&P 500, an index of 500 of the top companies in the U.S., which has had an average annual return of 10.64% over the last 100 years. We’re also using the Social Security Administration’s definition of full retirement age, which is 67 years old for most people.
Discover More: I’m a Self-Made Millionaire: 5 Stocks You Shouldn’t Sell
40 Years Old
If you invest $1 every day for 27 years, from your 40th to 67th birthday, you’ll have put a total of around $9,862 into the market. However, that money will have actually grown to $57,357, almost six times what you put in.
30 Years Old
If you invest $1 a day from your 30th birthday until the day you turn 67, you’ll have invested a total of $13,514. The total amount in your account when you retire would be $172,806, which means that you’ll have gained $159,292 just by consistently putting money into the market over time.
20 Years Old
If you start investing $1 a day on your 20th birthday, you will have invested a total of around $17,167 by the time you reach 67. However, because your investment would have grown an average of 10.64% every year, you would actually have $507,662 in your account. That means that your earnings would be $490,495 from just a $17,167 investment.
Investing $5 Every Day
Let’s see how much you can save if you slightly raise your daily investment to $5. While $5 isn’t that much by itself, putting aside $5 every day means about $150 a month in savings. Not everyone may be able to do this, but if you can, it can really be worth it.
Here’s how much you could have for retirement if you start investing $5 a day, based on the same S&P 500 index with an average annual return of 10.64%.
40 Years Old
If you start investing $5 a day from your 40th birthday until you turn 67, you’ll have invested about $49,310. At 67, you would have approximately $286,787.
30 Years Old
Starting at age 30, if you invest $5 a day until you’re 67, you’ll have put in around $67,570. By retirement, this will have grown to about $864,030.
20 Years Old
For those who begin at age 20, investing $5 daily until age 67 means putting in $85,835. This would grow to about $2.5 million by the time you retire.
Investing $10 Every Day
If you can double your daily investment to $10 a day, or around $300 a month, you can end up with a serious nest egg.
40 Years Old
By investing $10 every day from your 40th until your 67th birthday, you will have contributed about $98,620 to your retirement funds. This investment would grow to an estimated $573,573 by the time you retire.
30 Years Old
Starting at 30, a daily investment of $10 until age 67 totals $135,140. After staying in the market for 37 years, you would have $1.7 million in your retirement account.
20 Years Old
If you start investing $10 daily at age 20, by the time you reach 67, you’ll have invested $171,670. This could grow to about $5 million by the time you reach retirement age.
More From GOBankingRates
- 7 Reasons You Should Consider a Financial Advisor -- Even If You're Not Wealthy
- I'm an Economist: Here's My Prediction for Social Security If Trump Wins the 2024 Election
- 3 Things to Do This Week If You Have Debt
- 3 Things You Must Do When Your Savings Reach $50,000
This article originally appeared on GOBankingRates.com: How Much You’ll Retire With If You Invest $1, $5 or $10 a Day
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
