Many workers dream of becoming millionaires, but is it possible to grow a 401(k) or individual retirement account to the million-dollar mark?
The prospect of growing your retirement accounts to a seven-figure value largely depends on how early you start investing. While experts recommend starting to invest in your 20s, many Americans begin much later.
For example, assuming an annualized return of 6%, a 35-year-old hoping to retire at 67 would have to invest $863 each month to grow an account to $1 million.
[Related:How Much Should You Save for Retirement in 2025]
How Much Is Enough?
Workers need to save a substantial amount of money to sustain a retirement that lasts three decades.
But how can savers know they’re on track for a retirement that works for them? For example, a person who envisions frequent travel adventures will need more money than someone who plans to stay closer to home and enjoy time with family and friends.
“Enough is not just a dollar amount. It is knowing what is enough for you and whether you have had enough of what you are doing now to move toward what is next,” said Preston D. Cherry, founder and president of Concurrent Wealth Management in Houston, and author of “Wealth in the Key of Life: Finding Your Financial Harmony,” in an email.
“Becoming a millionaire is part math, part mindset, and both matter equally,” he added. “First, know you are not starting from zero. You are building from where you are, then letting the numbers work for you.”
[READ: Can You Retire on $1 Million? Here’s How Far It Will Go.]
How Much to Save in an IRA
Investors contributing to a traditional IRA should take full advantage of the annual limits, according to Daniel Milan, founder and managing partner of Cornerstone Financial Services in Southfield, Michigan.
“If your household will receive a pretax deduction for an IRA contribution, then I advise contributing the maximum allowable into the IRA, as long as you have first maxed out your annual allowable contribution into your 401(k),” he said in an email.
In 2025, contribution limits for both Roth and traditional IRAs are $7,000 per year, or $8,000 for those age 50 and older.
“Even if your contribution isn’t tax-deductible or you don’t qualify for a Roth IRA, your investments will grow tax-deferred,” said Phillip Battin, president and CEO at Ambassador Wealth Management in Warrenville, Illinois, in an email.
“Unfortunately, many people skip IRA contributions when they don’t get a tax break, but they ultimately miss out on years of potential growth,” Battin added. “A tax advisor can help you understand what you qualify for and how to make the most of your options.”
[Read: $1K Trump Accounts Are Coming: Experts Weigh In on Who Qualifies, Benefits and Drawbacks]
How Much to Save in a 401(k)
Investing limits are higher in an employer-sponsored 401(k) than in an IRA.
“In 2025, those under 50 can contribute up to $23,500 in a 401(k), and those from 60 to 63 can contribute up to $34,750,” said Trevor Houston, CEO at ClearPath Wealth Strategies in Frisco, Texas, in an email.
“I’ve seen clients in their 50s who stick to those 401(k) limits rebuild big financial gaps in under 10 years,” he added.
The extra contribution for those between 60 and 63 is a special provision of the SECURE 2.0 Act.
Does that mean you’ll reach $1 million? Not necessarily, depending on when you begin saving.
For example, a 50-year-old with no or little savings would have to save about $2,500 a month to amass $1 million by age 73, when required minimum distributions kick in. That’s a tall order.
But what about saving $1,000 a month, downsizing retirement expectations and making other changes? That would yield about $397,000, assuming the same 6% annualized return, which is a somewhat conservative number.
That’s far from millionaire territory, and it might mean taking on some extra work to earn more money and waiting until age 70 to take Social Security. But having that knowledge is at least the basis for making a plan.
Take Advantage of Catch-up Contributions
In 2025, savers 50 and older can contribute an additional $7,500 to a 401(k) for a total possible contribution of $31,000.
For an IRA, the catch-up limit is $1,000 for a total of $8,500.
“Additionally, a great way to catch up if you are maxing out your qualified retirement plans is to begin contributing and investing in a taxable brokerage account, which can allow you to quickly make up for lost time as there is no contribution limit in those types of accounts,” Milan said.
How Much to Save if You’re Starting in Your 40s
For a 45-year-old aiming for $1 million, the monthly savings target jumps to about $1,600 to $1,700 per month at a 6% annualized return, Cherry said.
“This is where catch-up contributions in your 401(k), strategic use of a taxable brokerage account, and maximizing your employer match can help close the gap,” he said.
“Automating contributions, increasing them when your income rises or bonuses come, and starting with what is doable today all build powerful momentum over time,” Cherry added.
“Just know that you are not starting behind. You are building better,” he said.
Don’t Forget the Employer Match
Taking advantage of employer matching contributions to a 401(k) is one of the easiest ways to boost your retirement savings, Battin said.
“Make sure you understand your employer’s guidelines for matching and be sure to contribute enough to get the full benefit,” he said. “Your 401(k) should be a key part of your retirement plan, and contributing enough to get the full employer match should be a top priority.”
Do You Need $1 Million?
With careful planning, many Americans can enjoy a comfortable retirement without their accounts reaching the $1 million mark.
For those who are worried about having enough, there are some strategies, both mathematical and mental, to keep in mind.
“It is often remarked that ‘victory loves preparation,'” Battin said. “If you’re getting a late start on retirement savings, it’s important to start now and stay committed to taking control of your finances and growing your wealth.”
It may be necessary to adjust your lifestyle to free up money for the future, he added.
“You might also consider selling unused assets or cutting expenses, like downsizing or refinancing debt, to boost your savings,” Battin said. “Even with a late start, discipline, strategy and a willingness to stay focused on the goal can make a meaningful impact on retirement readiness.”
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How Much Do I Need to Contribute to My Retirement Accounts Per Month to Become a Millionaire? originally appeared on usnews.com
