Need help! Can $1,500 a month grow to $650,000 in 20 years?

General
1

I’m totally new to this and a little embarrassed. I just finished paying off a ton of debt and have saved up enough to cover 6 months of my expenses, including rent. I live near DC, so I’ve given up on the idea of ever owning a home, haha. I have two kids, ages 10 and 7, and I’ve just started saving for their college.

I’m 43 and feel way behind. I only have about $10,000 in my 401k. I went through a divorce, a huge custody battle, and a career change, so it’s been a rough ride.

Now, after paying bills and saving for college, I have $1,500 a month to invest. I’ve been using compounding calculators, and some say I could have $650,000 for retirement in 20 years with a 5% return. Is that even realistic?

My main goal is to save for retirement. I’m planning to retire in Michigan since it’s more affordable. Is this a good start?

I’m proud of being debt-free and having savings, but I have no clue where to begin when it comes to investing!

2

Using the NerdWallet calculator, $1,500 monthly for 20 years at 7% annual return gives you about $787k. A 9% return could give you close to $1M. Of course, nobody knows for sure what the actual return will be, but that gives you an idea.

3

Here’s the secret Wall Street doesn’t want you to know—if you make the percentage higher, you get more money! I like to aim for 1000%, haha.

4

Or just double your $1,200 nine times!

5

Why stop at 9? Do it 90 times, then another 90, and then 10 more just to be safe. You’ll be rich!

6

Throwing in just $10 more a week and waiting for 24 years instead of 20 could push your 7% return to over $1 million instead of $700,000.

7

Look into the Bogleheads forum for solid, slow-and-steady investment strategies.

Put money into your 401k and Roth IRA. Do what you can, something is better than nothing. I had zero dollars saved at 40, but with aggressive saving and some good growth years, I’m now well on track for retirement.

Oh, and date someone with a solid 401k and a weak heart. :laughing:

8

This person knows what’s up!

9

Haha, solid advice, especially that last part! Bogleheads is legit—slow and steady wins the race.

10

Quick question—if I max out my 401k, would it be smart to invest the same way in a brokerage account with any extra money I have?

11

You mean investing in the same funds?

12

Yeah, exactly. I was thinking it would give me more flexibility since I wouldn’t lock it up.

13

It’s best to max out tax-advantaged accounts like a 401k first. Then you can invest in a taxable account. If you think you’ll need the money in the short term, a high-yield savings account (HYSA) or something similar is better. Let your invested money grow long term.

14

Most people would recommend prioritizing your retirement savings over your kids’ college. They can take out student loans, but you don’t have any options if you don’t save enough for retirement.

15

Totally agree. Also, build an emergency fund before going all in on retirement. Be upfront with your kids about what you can help with, like in-state tuition. And once they’re more independent, you could take on a side gig for extra income. Live frugally, save, and invest.

16

Read this in Dave Ramsey’s voice!

17

Pick up a side gig like cleaning gutters for $200 an hour to help pay for college.

18

Now read it in Gordon Ramsay’s voice. :joy:

19

Good point! So if I have $2,000 a month to invest, what could I expect after 20 years? Some calculators say I’ll have a million with a 5% return. Is that right?

20

If you input the same numbers, all calculators should give the same answer.