Retire with £1m? This is what I think you’ll need to save each month

first_imgRetire with £1m? This is what I think you’ll need to save each month Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Simply click below to discover how you can take advantage of this. If you want to retire with a million in the bank from a standing start, it’s going to take some doing. However, with a strict savings and investing plan, reaching this target isn’t as hard as it first appears. Crunching numbers If you want to build a £1m nest egg, you would need to put away around £1,750 a month for 40 years in a savings account with an interest rate of 1%. That’s a tremendous amount of cash, and would be an impossible target for most people to meet. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Luckily there’s another way. By investing your money, you can significantly reduce the time it takes you to hit that £1m benchmark, and you won’t have to put away as much each month as well. Investing for the futureBy investing, you can achieve a much higher return on your hard-earned cash. For example, over the past three-and-a-half decades, the FTSE 100 has yielded a return of around 9% per annum for investors. That’s including income and capital growth. Compared to the 1% or less available on most cash savings accounts right now, this rate of return is highly attractive. While it’s difficult to predict what the future holds for the market in the short term, over the long run, the FTSE 100 should continue to produce attractive returns for investors. As more than 70% of the index’s profits come from outside the UK, it is a global index. This implies that if the global economy keeps growing, the FTSE 100 should also continue to head higher. Once again, it isn’t straightforward to tell what sort of growth the global economy will achieve in the next three-to-five years. However, over the next few decades, it’s highly likely the economy will be much bigger than it is today. Compound interest Using the same numbers from the example above, £1,750 a month invested in the FTSE 100 would grow to be worth £8.3m after four decades. That’s assuming an average annual return of 9%. To hit the £1m mark, monthly contributions of around £230 a month would be required for 40 years.  It’s vital to keep costs low as well if you want to save as much of your money as possible. Today, investors can buy an FTSE 100 tracker fund with costs as low as 0.1% per annum. This suggests total fees of around £25k over the 40 years of saving (included in the example above). However, picking a fund with an annual charge of more than 0.1% would have a much more significant impact. A yearly fee of 0.5% would cost £124k over the four-decade time frame. Meanwhile, a fee of 1% would cost a total of £230k. That’s why it’s essential to keep fees low if you want to make a million. If you find a low-cost FTSE 100 tracker fund, all you need to do then is sit back, relax, and watch your money grow (as well as keeping up the monthly deposits). Enter Your Email Address Image source: Getty Images. Our 6 ‘Best Buys Now’ Shares Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.center_img “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Rupert Hargreaves | Saturday, 8th February, 2020 I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! See all posts by Rupert Hargreaveslast_img read more