Many investors hope to build up a significant nest egg by the time they reach retirement age. It's not as hard as you might think to amass $1 million or more, given the right mix of time, steady deposits into your portfolio, and portfolio returns.

The return portion of this equation is important, as you'll want to at least match -- and ideally beat -- the returns of the wider market over long time periods. Most individual stocks will not deliver those market-thumping returns, however.

Microsoft (MSFT -0.15%) might be a different story. Sure, the tech giant is already massive today and has created many millionaires since its founding in 1975. But owning the stock over the next several decades might help you move toward your retirement goals.

Let's take a closer look.

It is good to be the king

Microsoft's status as a $1.7 trillion company today means investors can't expect anything like the soaring growth that the company posted in its earlier years. However, that size provides advantages that the business didn't have back in the 80s or 90s, too.

Consider its dominant hold on several industry niches that are likely to expand quickly over the next few decades. These include productivity software, video games, VR, the metaverse, cloud computing, and hybrid work, just to name a few.

It is anyone's guess which tech trends will be popular in 2032, but Microsoft will likely play a big role in the industry. "No company is better positioned than Microsoft," CEO Satya Nadella said in late July .

Reinvested dividends

Dividend income can help a retirement plan in several ways. It cushions returns during those down years, for example, and allows you to steadily accumulate more shares by automatically reinvesting any payout. There's a psychological component, too, as dividend income can help you hold onto a stock longer, avoiding the type of turnover that hurts portfolio returns over the long term.

A Microsoft investment checks those boxes, too. The company in late September raised its dividend by 10%. And that payout has lots of room to rise over the next several years. In its most recent quarterly results released earlier this week, pre-tax income was up to $22 billion over the last three months, compared to $21 billion a year earlier. That steady success means Microsoft can keep investing aggressively in its growth initiatives while still delivering more cash to shareholders over time.

The outlook

The short-term outlook is cloudy for Microsoft's business, which is already seeing deteriorating selling conditions in key niches like productivity software, PC hardware, and video games. But investors focused on retirement can safely look past those challenges, which will be a distant memory a few years from now.

In the meantime, you can pick up Microsoft stock today at a valuation that investors haven't seen since the early days of the pandemic. The stock's 30% decline through late October essentially tracks the losses in the wider Nasdaq Composite index.

But Microsoft has much brighter prospects than the average tech stock. It also boasts killer competitive advantages and lots of cash. These factors are likely to make the stock a long-term winner in a portfolio that's aiming to cross that $1 million mark.