Can You Retire a Millionaire Investing Just $10 a Day? The Answer Is Yes -- Here's the Math

Key Points

• Investing your savings in an IRA or 401(k) is key to helping it grow more quickly.

• The size of your nest egg will depend on your returns and on how long your money is invested.

• You may need to save more than $10 per day to reach your retirement goal.

• The $23,760 Social Security bonus most retirees completely overlook ›

These days, you don't have to go far to find a company or influencer promising to show you the secret to retiring a millionaire. A lot of these claims can sound far-fetched -- and some are. But that doesn't mean it's impossible to retire with $1 million or more if you don't have a six-figure job or a big inheritance.

It's technically possible to retire with $1 million by saving just $10 per day. But there are a few things that need to happen, apart from regular contributions, to pull this off.

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How to save $1 million with $10 per day

The first thing to recognize is that you're probably not going to approach $1 million by stashing $10 a day in a savings account. If you set aside around $300 per month and earned a 3% annual percentage yield on your funds the entire time, it would take over 75 years to reach that goal. That's not realistic for most people.

Fortunately, you can grow your savings a lot faster by investing. If you have a 401(k) through your job, you could use that. You could also open an IRA. Both types of accounts offer tax benefits that can help you save money now or in retirement.

However, they also have limits on how much you can contribute to them. IRAs only allow you to set aside up to $7,000 in 2025, or $8,000 if you're 50 or older. Adults under 50 can contribute up to $23,500 to a 401(k) this year, $31,000 if age 50 to 59 or 64 or older, and $34,750 if age 60 to 63.

If you're saving $10 per day, that comes out to $3,650 per year, so either type of account should work just fine for you. Investing enables you to grow your savings at a much faster rate because the assets you own appreciate over time. You can also reinvest dividends to start earning gains on these as well. But how much you walk away with depends on two things: your rate of return, and how long you leave the money invested.

A higher rate of return and a longer time frame both lead to greater gains. To retire with $1 million by investing $10 per day ($70 per week), you'd need a little over 35 years, assuming you earn a 10% average annual rate of return. This is in line with the average stock-market return over the last 50 years. So if you get an early start on your retirement savings, this could definitely be doable. But there are a few problems you might run into along the way.

Common challenges you might face

While the above example reveals that it's theoretically possible to retire a millionaire saving just $10 per day, there are a few ways this could go awry, including:

• Getting a late start on retirement savings
• Not earning a 10% average annual rate of return
• Not saving $10 per day consistently

In the first case, you may need to set aside more than $10 per day to reach your goal. Make a note of how much you already have saved for retirement; don't forget about old retirement accounts with former employers. Then use a retirement calculator to figure out how much you need to save per month to reach your goal.

You may also have to save a little more if you're concerned that you may not earn an average return of 10% per year. While this may be the historical average, there's no way to know whether it will be true in the future. So if you can afford to, save a little more than $10 per day just to be safe.

If you're struggling to meet your $10-per-day goal, you may have to take a different approach. If you qualify for an employer's 401(k) match, you could put some of your money in this account as you're able; this way, you don't have to save the entire amount on your own. You could also save any year-end bonuses or tax refunds you qualify for in an IRA.

Another option is to look for ways to increase your income, like working overtime or starting a side hustle. Or you could just push your retirement date back a bit to give yourself additional time to save.

You should also keep in mind that $1 million may not be enough to cover all your retirement expenses, depending on your life expectancy and your lifestyle. Rather than aiming for an arbitrary target, come up with a personalized savings goal that takes your own spending habits into account.

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