Dubai: The number of retirement millionaires are still at record levels worldwide, recent statistics show. However, let’s say you started saving later in life, would you still be able to retire a million dirhams richer?

Most experts recommend contributing at least 10 per cent to 15 per cent of your income to your retirement fund to retire rich. Let’s calculate how much of that would you have to invest to retire a millionaire, if you were say, 45 years old.

### How much a 45-year-old needs to invest to retire a millionaire?

When calculating how much a 45-year-old should invest to retire a millionaire in 20 years, experts recommend that one needs to account for three different rates of investment return.

1. 3 per cent (a conservative portfolio of mostly bonds)

2. 6 per cent (a combination of stocks and bonds), and

3. 9 per cent (a portfolio that’s stock-heavy or contains index or mutual funds)

A retirement age of 65 would give 45-year-olds 20 years to save. Here’s how much such a person would need to invest each month to become a millionaire by the traditional retirement age of 65:

1. When putting money into investments that give a 3 per cent yearly return, Dh3,100 would need to be invested each month to reach Dh1 million by age 65.

2. If instead, cash is periodically contributed to investments that give a 6 per cent yearly return, Dh2,200 would have to be invested per month for 20 years to end up with Dh1 million.

3. If investments that give a 9 per cent yearly return is opted for, which is a more aggressive form of investing, Dh1,600 needs to be invested per month for 20 years to reach Dh1 million.

### What if I start investing at age 40? How much lesser should I invest to retire a millionaire?

If you were to start investing for a 9 per cent yearly return just five years earlier at age 40, you would need to contribute Dh950 per month to reach Dh1 million by age 65. That means contributing Dh650 less per month than you’d have to contribute if you wait until age 45.

The earlier you start investing the less money you have to contribute to your investments to reach Dh1 million. This is because interest is most effective when it has a longer amount of time to grow your money.

### Will Dh1 million be enough to comfortably retire? Also, what if I don’t have 20 years left to retire?

Now, Dh1 million may not necessarily be enough for retiring, but Dubai-based financial planners reiterate it is definitely a good start – and it’s much more than most people end up with.

So if you’re 37 years old or younger, start investing Dh750 per month today to get on track to a seven-figure nest egg.

If you start earlier, you could reduce the amount you must save to hit your Dh1 million target. Someone who starts saving at 25 and who wants to retire at 67 would need to invest just Dh273 per month.

But, even if you’re well beyond your 20s, saving just Dh750 per month still makes it possible to achieve your Dh1 million goal.

What if you can't afford to invest this much?
Saving hundreds or thousands of dirhams per month can be difficult or even impossible for many newbie investors. But you can also boost your savings by making sure you're investing aggressively enough.

While you don't want to invest in extremely risky stocks, it's also important to avoid being too conservative.

If you're investing heavily in bonds, for example, you'll earn much lower returns than if you'd invested in stocks. Over time, those lower returns are going to make it much harder for your money to grow.

### What if I start investing with lower risk to retire a millionaire in the UAE?

Starting at age 20: Assuming a 6 per cent profit or return to your investments, compounded monthly, you should aim to invest Dh364 a month toward retirement to reach Dh1 million in savings by age 65.

Starting at age 30: Assuming a 6 per cent profit or return to your investments, compounded monthly, you should aim to invest Dh704 a month toward retirement to reach Dh1 million in savings by age 65.

Starting at age 40: Assuming a 6 per cent profit or return to your investments, compounded monthly, you should aim to invest Dh1,444 a month toward retirement to reach Dh1 million in savings by age 65.

Starting at age 50: Assuming a 6 per cent profit or return to your investments, compounded monthly, you should aim to invest Dh3,439 a month toward retirement to reach Dh1 million in savings by age 65.

Where do I invest Dh1,600 per month? Stock markets give you a profit of 10 per cent annually
You’ll need to earn an 9 per cent average annual return to be on target when investing Dh1,600 per month for 20 years to reach Dh1 million.

With stock markets worldwide producing average annual returns of around 10 per cent, that should be easily doable – even if you just invest in index funds that track the performance of the market.

You do, however, need to be sure you’re exposing yourself to an appropriate level of risk and building a diversified portfolio – whether that includes stocks, bonds, cryptocurrencies, ETFs, or a mix of all different investment types.

### How do I know where to invest my money to become a millionaire?

To give yourself the best chance at reaching millionaire status, it's first important to choose the right investments.

High-risk, high-reward investments (like penny stocks or meme stocks, for example) can be tempting because it's possible to earn a lot of money in a relatively short period of time.

However, they can also be incredibly dangerous, and there's a good chance you'll lose more than you gain over the long run.

A better option, then, is to buy stocks from strong companies and hold them for as long as possible. These investments may not earn explosive returns, but you're less likely to lose money over time.

Most key exchange-traded funds, for example, may only earn average returns of around 10 per cent per year. But most key stock index benchmarks has a decades-long track record of surviving market crashes and economic downturns, so it's a safer bet than stocks from trendy new companies.