In a previous column, I shared how one can calculate the amount of money one will need to retire well.

That amount can be easily calculated using the Retirement Nest Egg Required Calculator available in the “Tools” section of JosephSangl.com.

When one sees the enormous nature of the nest egg target, it becomes very clear that it is necessary to develop a plan to reach the goal.

I do not like having all of my eggs in one basket, so my long-term investment strategy is to invest in a wide variety of investments including real estate, mutual funds, small businesses and individual company stocks.

There are certainly many avenues to achieve the retirement nest egg target. Some may pursue real estate investments such as rental properties or buy-fix-sell flips. Others may pursue building a business that can be sold or used to provide retirement income. Still others may pursue investing in the stock market through individual company stocks and bonds or the purchase of mutual funds.

Regardless of the investment avenue, the ultimate goal is to invest money that will grow and allow one to reach a retirement nest egg goal.

When one is saving for retirement, there are three key items to consider: time until retirement, amount invested, and an investment’s growth rate.

As an example of the impact of the investment’s growth rate, suppose one will need a retirement nest egg of $2.5 million to retire with a $45,000 annual gross income in 20 years. This nest egg target can be a very intimidating number.

With an 8 percent annual investment growth rate and a starting balance of zero, one will need to save around $4,250 PER MONTH to achieve $2.5 million. That is a huge number. However, if one were to obtain a 12 percent return on their investment, one would need to save around $2,550 per month. This is $1,700 per month less than an investment that has an 8 percent growth rate. The investment’s growth rate matters a lot.

Time also has a huge impact on an investment’s growth. Using the same retirement nest egg target of $2.5 million and 8 percent annual growth BUT with 40 years until retirement, one would have to save approximately $725 per month. This is $3,525 less per month than if one had only 20 years to save. If one’s investment grew at 12 percent annually, one would have to save $215 each month. That is $2,335 per month less than if one had only 20 years to save. Time matters a lot.

You can use the Investment Value Calculator at JosephSangl.com to calculate the amount you should be saving each month to achieve your retirement goal. Be sure to vary the annual rate of return (growth rate) and the amount saved each month to see the impact that it has on the investment’s value.

Joe’s first book, “I Was Broke. Now I’m Not,” was released in January. You can obtain your copy at www.joesangl.com

or at Amazon.com