If you have a portfolio worth $1 million by the time you retire, you could be in a great position to control your postwork financial future. Even if that may not be enough to retire comfortably in every area of the country, it could give you plenty of options to consider. You could withdraw some of the money or perhaps choose dividend-generating investments that give you some recurring income without having to deplete your nest egg.
To get to $1 million, a good strategy is to invest in quality growth stocks, since they can increase the chances that you'll be able to achieve market-beating returns in the long run.
Below, I'll show you how much you would need to invest in the Invesco QQQ Trust (QQQ 1.54%) today, based on various ages, to be on track to reach at least $1 million by the time you retire. This exchange-traded fund invests in 100 large nonfinancial companies.
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Why the QQQ ETF is ideal for long-term investors
If you're investing for the long haul (e.g., at least 10-plus years), then you'll probably want to consider prioritizing growth stocks for your portfolio. That's because while growth stocks can be volatile in any given year, over a long time frame they generally do well and can outperform the S&P 500, a leading index of how the overall market is doing.
The Invesco QQQ Trust can be ideal for this purpose. It doesn't track the S&P 500 but instead mirrors the Nasdaq-100, which is a collection of the top 100 nonfinancial stocks on the Nasdaq Stock Market. It is a more selective and exclusive club than the S&P 500.
In the past 10 years, the Invesco QQQ Trust has generated total returns (which include dividends) of 460%, versus 266% for the S&P 500. That means the Invesco Trust has averaged an annual return of nearly 19% over that stretch, while the S&P 500 has grown by close to 14% per year.
How much would you need to invest in the Invesco QQQ Trust to help ensure you're on track to retire with $1 million?
The market has been red hot in recent years, and the danger for investors is to assume that it will continue to be hot. Realistically, there may be more-tepid growth in upcoming years. Setting expectations too high may lead to disappointment later on.
A more conservative approach could be to assume that the Invesco fund slows down and perhaps falls in line with the S&P 500 average annual return of around 10%, or perhaps even lower than that. Stock returns are never guaranteed. With tariffs potentially affecting companies and the economy being far from ideal, businesses may experience a slowdown in the near future.
However, assuming annul growth rates of between 8% and 11% -- which, again, are not guaranteed -- here is how much you would need to have invested today, in a fund such as the QQQ ETF, to be on track to retire with $1 million or more (assuming you retire at age 65).
| Age | Years to Retirement | 8% Growth | 9% Growth | 10% Growth | 11% Growth |
|---|---|---|---|---|---|
| 55 | 10 | $463,193 | $422,411 | $385,543 | $352,184 |
| 50 | 15 | $315,242 | $274,538 | $239,392 | $209,004 |
| 45 | 20 | $214,548 | $178,431 | $148,644 | $124,034 |
| 40 | 25 | $146,018 | $115,968 | $92,296 | $73,608 |
| 35 | 30 | $99,377 | $75,371 | $57,309 | $43,683 |
| 30 | 35 | $67,635 | $48,986 | $35,584 | $25,924 |
Calculations by author.
What you can do if you're not on track
The above numbers can seem intimidating and it may not be likely for the vast majority of people to have such large sums of money available to invest right now. But the table can help serve as a guide. It also underscores the importance of investing on an ongoing basis, to add to your balance over time, for it to become as large as possible. Knowing whether you're on track can at least allow you to set realistic expectations and possibly adapt, by either trying to save and invest more money, or planning to retire a bit later, to allow for more growth.
In the end, a lot is going to depend on the growth rate you end up averaging over the long run. There's no guarantee what it might be, but by targeting growth stocks with the Invesco QQQ Trust and similar types of ETFs, you can make the most of the money you invest in the stock market.
