Personal Finance

Is This True? With Only $45k Now, It Will Be $4M When I Retire?

Christy Bieber

Published: March 10, 2025 5:50 pm

There are many investing calculators out there that show you how much your nest egg can grow over time.

When you look at these calculators, you can see very impressive gains on even small sums of money — especially when you are running the numbers over a long time horizon. The big question, though, is whether that is realistic.

Specifically, if the calculator showed you have $45K now, is it really possible that this $45K could turn into a whopping $4 million? The answer, surprisingly, is yes — although you’d need a pretty long timeline for it to happen. 

How long will it take for $45K to turn into $4 million?

In order for a $45,000 investment to turn into a $4 million investment, you would need to leave the money invested for just over 47 years and earn a 10% average annual return. Now, that’s a long time — but if you managed to save $45K by the age of 20, then you’d have your $4 million nest egg by the age of 67. 

It may seem hard to imagine that you can take a $45,000 investment and turn it into $4 million without ever investing another dime. But, there’s a very simple reason why that happens. When your $45K earns a return on investment, the returns that you earn are reinvested. So, the money that your money earned starts earning even more for you.

The more money that you have, the more powerful this effect is. When you have $4 million invested, for example, it will earn you $400,000.00 in investment gains in a single year if you earn a 10% annual return.  Your $45K, on the other hand, will earn you just $4,500. Still, that $4,500 means you start with $49,500 the next year — so the next year you earn a little more and a little more after that.

Time also has a big impact on how effective compound interest is as well. The more time you have for your money to grow and for that growth to be reinvested, the richer you can become thanks to compounding. 

How you can put compounding to work for you

Since compounding is really good at helping you build wealth, it’s a smart financial move to put it to work for you. You can do that by investing money as early as possible and investing as much as possible when you are young. 

While it would probably require a lot of sacrifices to save $45K by age 20, if you managed to make it happen, then even if you never invested another dime throughout your entire career, you’d be able to hit that $4 million number. This could produce $148,000 in annual retirement income for you if you followed the 3.7% rule. 

By contrast, if you waited until you were 30 to start investing and you wanted $4 million, you’d have to invest $1,009.98 over 37 years to have $4 million by age 67. That’s $448,431 you’d have to invest, which is a lot more than $45k. 

The sooner you start investing, the more compound interest can help you grow your wealth, so even if you have to start small, make it a point to start putting away money for your future as soon as you have some funds coming in. Consider working with a financial advisor to help you decide how much to invest and to find room in your budget to make it happen. Your future self will thank you.