If you're dreaming of a seven-figure retirement nest egg but don't think you'll ever earn enough to get there, think again. A little now can turn into a lot later. The key is consistency, and time. You must commit to putting a consistent amount of money into the market for many, many years. If you can do that, you'll find that time does a lot of the heavy lifting for you.

With that as the backdrop, here are three different saving and investment plans that will get you to the $1 million mark on a relatively average $50,000 salary. Note that we're assuming an average annual return of 10% on an investment in an S&P 500 (^GSPC -0.18%) index fund, and also assuming you'll be willing and able to work -- and earn a relatively consistent income -- between the ages 25 and 65, after which time you'll retire.

A retired couple sitting on their porch steps.

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Three saving and investment plan scenarios

  1. Invest 36% of your income ($1,500 per month) for 20 years: Yikes! After subtracting taxes and even the most minimal of living expenses, it may be tough to scrape together $1,500 per month, or $18,000 per year, to put into the market if you've waited until you're 45 years old to start. That's not to say it can't be done; some people are certainly doing it. For most of us though, that's an aggressive, hopeful plan.
  2. Invest 12% of your income ($500 per month) for 30 years: Wow -- what a difference just 10 years makes! By getting started just a decade earlier, you can reduce your monthly requirement to a third of what it would be if you waited until the last 20 years of your working life to get going. That's $6,000 per year, which isn't chump change on a $50,000 salary. It's certainly achievable, though.
  3. Invest 5% of your income ($200 per month) for 40 years: Again, wow. By doubling the amount of time you're putting money into the stock market, you've reduced your monthly minimum investment by more than 85% of what you'd need if you wait until you're 45 to begin the process.

For reference, $200 per month is $2,400 per year. That's still not necessarily an easy amount to come up with, particularly if you're just getting started with life. It's certainly a much easier amount to come up with than $1,500 per month, though ... at any age.

For perspective only

These broad calculations are only a starting point, of course. There are several other factors that could impact your outcome. For instance, is any (or all) of this money being grown in a taxable account? If it's being contributed to a tax-deferring IRA, what will it cost you in taxes when it comes time to withdraw it?

You should also consider the odds of actually earning an average of 10% on your money. That's the broad market's long-term average yearly return, but who's to say we won't enter a period of long-term lethargy?

Moreover, don't beat yourself up if coming up with even $200 per month is a stretch for you right now. You'll likely be earning much more as a 40-year-old than as a 25-year-old, just as you'll probably be earning more as a 55-year-old than you will as a 40-year-old. Retirement savings plans are fluid because they have to be. Even the most detailed of such plans require regular tweaking, as does your spending and investing budget.

The three broad plans above do give you an idea of the cost of waiting to do anything. The power of compounding -- earning money on your previous investment earnings -- is clear. Even if you're starting small, it's better than not starting at all.