5 Million Dollar Man

The next 5 million dollar man
How much do you need to save and invest to accumulate $5 million dollars?  Max Osbon fired up the Excel spreadsheet to create a simple and revealing look at how to do just that.

Four facts to enter
Armed with four simple facts – your current age, your current investable wealth, your expected rate of return, and your expected  annual savings this year – you can get a very good idea of what it takes to end up with a $5 million portfolio at age 65.

Play around with the numbers and you’ll see that all four of the inputs affect the journey to $5 million – or whatever your goal may be.

But what about taxes?
I like the way you think.  After-tax return is the key portfolio performance measure. Fortunately, the government encourages saving by providing a number of tax-deferred options, such as IRAs, Roth IRAs, SEP IRAs, and 401ks. Until you withdraw the money there is no difference between your pre-tax and after-tax return. We assume you take full advantage of these.  Second, we assume that your annual contribution will rise by 2 percent each year.

Work together
While accumulating $5 million is straightforward, it is not necessarily easy. To reach that goal, you must save, invest, and invest wisely.  The first two – save and invest – are up to you.  The third one – invest wisely – is your investment advisor’s responsibility.


This article may include forward-looking statements. All statements other than statements of historical fact are forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”). Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Various factors could cause actual results or performance to differ materially from those discussed in such forward-looking statements.

Nothing in this article is intended to be or should be construed as individualized investment advice. All content is of a general nature. Individual investors should consult their investment adviser, accountant, and/or attorney for specifically tailored advice.

Any references to third-party data or opinions are listed for informational purposes only and have not been verified for accuracy by the Adviser. Adviser does not endorse the statements, services or performance of any third-party vendor without specifically assessing the suitability of a third-party to a client’s or a prospective client’s needs and objectives.

Calculator results are shown for illustrative purposes only.  There is no guarantee that investment returns will meet projected levels. Consult a tax professional regarding treatment of tax-deferred accounts.

This calculator tool makes certain assumptions regarding contribution amounts and rate of return.  Returns may vary significantly if these assumptions were to change.

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