I’m 50 with no savings: Can I still retire a millionaire?

Dubai: Dreaming of retiring with a million-dirham nest egg but starting at 50 with no savings? While it may seem daunting, it’s still possible—if you act now.

Let’s break it down and see how you can reach your goal in 15 or more years.

How to save Dh1 million for retirement

Becoming a millionaire requires three key factors: time, compounding interest, and consistent savings. Even with a late start, the power of compounding can significantly boost your savings. The key is to invest wisely and start immediately.

Here’s how much you need to save based on different annual return rates:

At 4% annual return:

• Dh92 per day

• Dh2,798 per month

• Dh33,581 per year

At 6% annual return:

• Dh75 per day

• Dh2,265 per month

• Dh27,184 per year

At 8% annual return:

• Dh60 per day

• Dh1,821 per month

• Dh21,852 per year

At 10% annual return:

• Dh48 per day

• Dh1,455 per month

• Dh17,460 per year

Even if you start later, remember that the longer your money stays invested, the more compounding works in your favour.

How much do you need to retire comfortably?

Financial planners suggest you’ll need about 80% of your pre-retirement income annually. If you earn Dh100,000 per year before retiring, you should aim for at least Dh80,000 per year post-retirement.

A common rule, the 4% withdrawal rule, suggests dividing your desired annual retirement income by 4%. For example, if you need Dh80,000 per year, you should aim for Dh2 million in savings (Dh80,000 ÷ 0.04).

However, consider factors like rising medical costs and longer life expectancy, which may require you to save even more.

How much of your income should you save?

The more you save, the faster you’ll reach your goal. Here’s an example:

• A person earning Dh60,000 annually with a 2% salary increase and saving 15% of their income will accumulate about Dh400,000 in 20 years (at a 6% return).

• Increasing savings to 20% could grow their retirement fund to Dh530,000.

While these figures may not fund a luxury retirement, they can significantly improve your financial security.

Final takeaway: Start now, save more

The earlier you start, the easier it is to reach a million-dirham goal. If you’re starting late, consider these strategies:

• Save at least 15-20% of your income (or more, if possible).

• Cut unnecessary expenses and invest the difference.

• Seek financial advice to optimize your investment strategy.

• Work longer if needed to maximise your savings.

With disciplined saving and smart investing, you can still achieve your millionaire retirement dream—even if you start at 50.