Having 7 figures in the bank by the time you retire may seem like an impossible dream, but you can make that dream a reality with time and discipline. Here's how.

Start Saving Early

It's never too soon to start saving for retirement. Even teens with income from lawn mowing or babysitting can do it. The sooner you start, the more time the power of compounding (when you earn interest on the interest you've earned) can work for you.

For example, if you're 23 years old and expect to retire at 67, then you could save $1 million by investing $300 a month over that time in a tax-deferred account earning an average of seven percent a year. If you wait until age 36, then you'll have to save $800 a month to reach the same goal (see chart).1

Another advantage to starting early? Typically, the level of investment risk individuals can handle is determined by their goals, timeline and risk tolerance. With decades before you retire, you can probably handle a greater level of investment risk, put more of your money into stocks and use more investing strategies. Historically, over the long term, stocks have provided greater growth potential than other forms of investments. However, they may have more volatility (ups and downs) in the short term.

For example, Federal Reserve data from 1965 through 2014 shows that stocks posted an average annual return of 11.23 percent (compared with 5.04 percent for 3-month Treasury bills). In the 10 years since 2005, stocks returned an annual average of 9.37 percent (compared with just 1.44 percent for Treasury bills).

Starting Late? Step Up Your Game

Of course, if you're in your 40s, 50s or 60s and haven't started saving for retirement yet, it's not too late, but you'll need to increase the amount you save each month and perhaps delay your desired retirement date. Fortunately, you may be in your peak earning years, making saving a bit easier.

While you have lots of competing priorities for your money, you can make decisions—like eating out less often and choosing low-cost entertainment over expensive concert and sports tickets—that leave more money for saving.

Explore Retirement Accounts

You have many tax-advantaged options to save for retirement. If your employer offers a retirement savings plan like a 401(k), 403(b), 457 or Thrift Savings Plan, then you should strongly consider taking part in it. If your employer offers a matching contribution, then participating is even smarter! 

If your employer doesn't offer a plan—or if you want to supplement your employer-sponsored retirement plan—then you can open and contribute to an individual retirement account (IRA) as long as you or your spouse has earned income.

Learn more about IRAs available through Navy Federal.

We'll Help You Along the Way

Whether you'd like to open a Certificate or Rollover IRA or work with a Financial Advisor to explore your retirement investment options, Navy Federal offers the tools and resources to support you as you work toward your retirement savings goals.

How Long Does It Take to Save Up to Retire a Millionaire?

The following chart shows how many years it will take to save $1 million based on various monthly contributions. It assumes an average annual return of 7 percent in a tax-deferred account.1

Monthly Contribution # of Years
$100 59
$200 49
$300 44
$400 40
$500 37
$600 34
$700 33




$1,000 28

1Rate of return is for illustration only and does not represent the return of any specific investment. Calculations assume all earnings are reinvested in a tax-deferred account. Taxes will be due upon withdrawal at ordinary income tax rates.