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Want to Build a $2 Million Retirement Fund? These 3 Steps Can Get You There

Retirement isn’t cheap, and with costs continuing to rise, you may need to save more than ever to enjoy your senior years comfortably.

The average worker expects to need around $1.8 million to retire, according to a 2023 survey from Charles Schwab. Healthcare alone can be incredibly costly, with the average 65-year-old couple expected to pay around $315,000 in total out-of-pocket healthcare costs throughout retirement, a 2023 report from Fidelity Investments found.

While it’s not easy to build a $2 million nest egg, it is possible with the right approach. Here’s how to do it.

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Image source: Getty Images.

1. Determine how many years you have until retirement

The more years you have to save, the less you’ll need to contribute each month to reach your goal. Your first step, then, is determining how much time you have before you retire.

Although this may seem like a straightforward step, it’s crucial to be realistic with your expectations. Nearly half of baby boomers say they plan to continue working until at least age 70, a 2023 report from the Transamerica Center for Retirement Studies found, yet only 34% of boomers have a backup plan in case they have to retire earlier than expected.

Life can always throw curveballs, and it’s wise to prepare for them the best you can. Even if you’re planning on working to age 70 or beyond, it could be a good idea to prepare for an earlier retirement just in case.

2. Set realistic expectations for your investment returns

Asset allocation refers to how your investments are divided within your portfolio. Most investors have a mix of stocks and bonds in their retirement account, and how much you’re allocating to each will depend on your age.

When you’re younger and still have decades until retirement, you may choose to invest more heavily in stocks. They can be more volatile in the short term, but they also tend to see higher returns over time. As you age, then, your portfolio should gradually shift toward the conservative side to better protect your savings against market downturns.

If you’re calculating your future returns based on what your portfolio is earning now, you could end up overestimating how much your savings will grow. Your returns will likely slow down as you begin investing less in stocks and more in bonds, which means you may need to save more per month to reach your goal.

3. Invest as consistently as possible

Consistency is key to a robust retirement fund. Investing regularly throughout the year can help limit the impact of market volatility and maximize your earnings over time.

This strategy is called dollar-cost averaging. Rather than investing a large sum of money at once, you contribute smaller amounts on a routine schedule. Sometimes, you’ll invest when the market is surging. But other times, you’ll buy at steep discounts — which can save you money.

Reaching $2 million or more

Even with all of these steps, it’s still not easy to build a $2 million retirement fund. But if this goal is out of reach, the right strategy can get you as close as possible.

Let’s say that you currently have $100,000 in savings and want to reach $2 million by retirement age. If we assume you’re earning a modest 8% average annual return on your investments (which is slightly lower than the market’s historic average and can help take into account a more conservative portfolio as you age), here’s how much you’d need to invest each month to reach your goal:

Number of Years Amount Invested per Month Total Portfolio Value
20 $2,800 $2.004 million
25 $1,500 $2.001 million
30 $750 $2.026 million
35 $275 $2.047 million

Data source: Author’s calculations via

Again, not everyone will be able to reach $2 million in savings, and that’s OK. Not everyone needs a $2 million nest egg, and plenty of people can retire comfortably with far less. But no matter how much you can afford to save, the right approach can make it easier to build a robust retirement fund.

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