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A recent survey from Northwestern Mutual found that the average American has $88,400 in retirement savings — but Americans think they’ll need about $1.46 million to retire comfortably. Saving a million dollars (or more) for retirement might seem daunting.

But before you panic: Based on your age, if you max out your workplace 401(k) plan and other retirement savings accounts, you might have enough time to save $1 million for retirement. By investing in stocks and other financial assets, you can grow your savings to meet your retirement goals — in addition to Social Security income.

Let’s look at the big picture of what it means to save $1 million for retirement — and how your retirement dreams might be within reach.

Save $1 million for retirement with the magic of compound interest

Here’s the thing about saving a million dollars for retirement: You don’t have to save every dollar, and it doesn’t have to happen overnight. Saving for retirement is a long process where you stash away some money from each paycheck, then let the stock market do the hard work for you over several decades of investment growth.

Every dollar you save today to invest in stocks, bonds, and other assets that are appropriate for your goals will (hopefully) grow with the power of compound interest. As stock prices rise over time, as stocks pay dividends, as the bonds in your portfolio pay yield and grow in value, your retirement savings will grow as well.

How much can retirement savings grow? There are no guarantees, but over the past 30 years, the S&P 500 has delivered an average of 10.7% per year. Patiently investing in stocks over time can help you save $1 million or more for retirement.

How to Save $1 Million for Retirement — Starting with $0

The Northwestern Mutual survey found that the average American has $88,400 saved for retirement. But what if you don’t? If you’ve just started your career or paid off debt or recovered from financial setbacks, you may have $0 saved for retirement. And that’s okay!

It’s not too late. If you have a few decades left in your working career and start saving and investing now, you may be able to save $1 million for retirement.

Let’s look at some possible examples of how much you would need to save for retirement per month and for how many years to reach $1 million in retirement savings, based on your current age. This assumes that:

Invest in low-fee ETFs through your 401(k), traditional or Roth IRA, or brokerage account (these are all easy and affordable investment accounts that most Americans can use to save for retirement)

Data source: Author’s calculations and Investor.gov

As you can see, the longer you wait to start saving for retirement, the more you have to save and invest each month. Don’t assume you don’t have to worry about saving for retirement because you’re young — the early years of your career are some of the best opportunities to save money over the long term thanks to compound interest.

Is it ever “too late” to save for retirement?

Even if you’re in your 40s or 50s and haven’t saved much money for retirement, don’t assume it’s too late. Retirement planning is not a straight line. Most people have ups and downs in their career and family life; you might be going through a layoff, big family changes like a divorce, or the expensive process of raising children. Your personal finances are likely to improve, such as getting a big promotion, starting a business, or getting an inheritance or other financial gain.

Some people may not be able to save much money for retirement in their early years, but find that they can save much more for retirement in middle age. Especially if you’ve made good progress in your career, are making more money than before, and no longer have children living with you, middle age (and beyond) can still be a good time to save for retirement.

Conclusion

Saving a million dollars for retirement might be easier than you think, but you need to start now. People who start saving for retirement in their 20s may only need to save a few hundred dollars a month to reach $1 million by age 67. Use your IRA, 401(k), or brokerage account (or all three) to invest in diversified stock ETFs and let the stock market do the hard work for you.

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