How To Save $100,000 In Less Than 3 Years

It’s hard to think about life beyond just a few years out. Maybe it feels futile to save and invest when it will only be a few hundred dollars at a time. Perhaps you are looking for that last bump in savings to make retirement real. Planning for the short-term can make your long-term goals a reality. Once you get started, it can make your bigger goals feel more attainable. Not to mention, once your investments are started, they will continue to earn money for you making it easier to hit the next milestone.

Saving up that first $100,000 is a great milestone. It’s not an insignificant amount of money, and you can probably get there sooner than you think. Let’s take a look at a realistic scenario for how you can see a six-figure retirement account. For our example, we will assume a couple, who files their taxes jointly and has nothing saved for retirement. They will each invest the following amounts of money into a retirement plan, an IRA, and a non-retirement account over the course of one year:

  • $9,000 each into retirement plan ($18,000 total). If you are paid bi-weekly this is $346.15 each per paycheck.
  • $5,500 each into an IRA ($11,000 total). This can be broken down into monthly installments of $458.33 each or funded with a lump sum of money at bonus or tax-return time.
  • $200 per month into a non-retirement account ($2,400 total). If you need me to break this bullet point down further, please call me for help immediately.


This is $31,400 per year or $2,616.67 per month. Assuming an investment return of 8% per year, you will cross over $100,000 in 35 months, one month shy of 3 years! Any additional money you can invest during this time will put you ahead of this timeline or allow you to take less risk in your investments.

If you are increasing your contributions to retirement plans to meet this goal, you may wind up getting a larger tax refund at the end of the year. Use this refund to help fund your IRA’s or to increase your non-retirement savings. Many employers will offer a match on retirement contributions. This additional amount contributed will also speed up the savings timeline.

The best way to make this example a reality is to invest on a regular basis. Salary deferrals and automatic investment plans are offered by almost all investing institutions. By automating your investing, you will never miss your monthly investment. In just a few months, you will get used to the money being taken from your paycheck or checking account and you will never miss it.

This example is a great place to start. Perhaps you are able to save more, have different employer benefits, or are wrestling with debt. Working with a CERTIFIED FINANCIAL PLANNERTM professional can fine tune this strategy for your personal situation. Once you have crossed the $100,000 mark, you can set your sights on the next goal!

Happy Investing.