- Saving less than the price of lunch every day adds up to $1m upon retirement
- Investing $9 a day from birth in a savings account could top $1m by age 65
- Putting away $36 per day from 30 would net $1m by the time you finish work
- Starting at 40, saving $64 a day would hit $1m at projected future interest rates.
Published: 06:02 GMT, 9 February 2018 | Updated: 06:02 GMT, 9 February 2018
Putting away less than the price of lunch every day could provide enough money to make you a millionaire upon retirement at 65.
While superannuation is the surest way for workers to become a millionaire by the time they retire it could still be done with a savings account.
Saving a little more than $20 a day from the age of 18 could net a person the magic million dollar retirement fund.
Saving a little more than $20 a day from the age of 18 could net a person $1m upon retirement
Superannuation is the surest way for most to become a millionaire by the time you finish work
Parents setting up a nest egg for their children can set them on the road to financial wealth
Starting at 40 becomes harder but might be possible for someone who could come up with $64 a day at projected future interest rates.
Daily Mail Australia asked finance experts how Australians could set themselves up to retire with a seven figure sum and has advice from saving to superannuation to investing in property.
Graham Cooke is insights manager of the comparison website finder.com.au.
'A little goes a long way when it comes to saving,' Mr Cooke said.
'Our research reveals that saving less than the price of lunch everyday would make you a millionaire by retirement.
'With many savings accounts barely offering north of 2 per cent, it's easy to assume our low-interest world will be here forever.
Graham Cooke is insights manager of the Australian comparison website finder.com.au
Someone saving $64 a day at a 4 per cent rate from age 40 may be able to retire a millionaire
Savings, superannuation and property investment can help to build a $1m retirement fund
'However, with 80 per cent of economists surveyed by finder.com.au tipping a rise as the next cash rate move, these rates are set to rise.
'Presuming a long term average interest rate of 4 per cent, parents could set up a nest egg for their kids by setting up a savings account.
'Investing only $9 per day in a savings account at 4 per cent adds up to a healthy $1,018,814 by the age of 65.'
Most parents will not be doing that but saving $21 per day at a 4 per cent rate from the age of 18 would result in $1,060,270 at the same retirement age.
Thereafter, reaching the million dollar mark gets harder but it can be done.
A person saving $36 per day from age 30 would net $1,000,535 by retirement.
A person saving $36 per day at 4 per cent from age 30 could net $1,000,535 by retirement
Investing only $9 per day at 4 per cent from birth would add up to $1,018,814 by the age of 65
80 per cent of economists surveyed by website finder.com.au are tipping an interest rate rise
Starting at 40 a saver would reach $1,000,839 by the age of 65 if they put away $64 per day at the same interest rate.
'However, there are many other ways to make sure you have a large boost at retirement,' Mr Cooke said.
'For example, the top super funds offered returns above 8 per cent over the last three years.
'At these rates, you'd only need to be investing $5.50 per day from the age of 18 to retire as a millionaire.'
If you could find a fund that returned 8 per cent every year, you could reach the million dollar mark without adding to employer contributions.
The Association of Superannuation Funds of Australia (ASFA) is the peak policy, research and advocacy body for Australia's superannuation industry.
The top superannuation funds offered returns above 8 per cent over the past three years
The Association of Superannuation Funds of Australia says retirees don't need $ 1 million
ASFA said a balance of $1 million (in current dollars) at retirement was well in excess of its 'comfortable standard' of retirement benchmark, and might be difficult to achieve for most Australian workers.
A person aged 20 with no superannuation who initially earned $40,000 per year, increasing to $80,000 per year, would need to contribute an additional $125 per week under salary sacrifice.
A person aged 30 with a current superannuation balance of $40,000 who earned $80,000 per year would need to contribute an additional $175 per week.
'At later ages, additional contributions would need to be significantly larger,' an ASFA spokeswoman said.
ASFA's retirement standard benchmarks the annual budget needed by Australians to fund either a comfortable or a modest standard of living in the post-work years.
According to that standard to be comfortable at retirement singles who own their own home need $545,000 in superannuation and couples need $640,000 (in current dollars).
ASFA estimates a single person would need $545,000 in superannuation to be comfortable
ASFA says a couple would need $640,000 in super in current dollars to retire comfortably
That assumes retirees will draw down all their capital and receive a part age pension.
A single person aged 20 years old and entering the work force today who earned average wages throughout their working career would be well on track to reach the ASFA comfortable standard by the time they retired at 67.
It was a similar story for a single person aged 30 years old with a balance of $40,000 and who earned average wages for the remainder of his or her career.
A single person aged 50 years old with a balance of $135,000 who earned $80,000 per year would need to contribute an additional $200 per week to reach a 'comfortable' retirement.
According to finder.com.au, property was a good option to meet the million dollar target for those who could afford to purchase a house in the current climate.
Many young Australians feel locked out of the housing market due to soaring property prices
Bitcoin bought at $660 in 2012 would have been worth $1 million in December and $500k now
'Sydney house prices, for example, have increased by 40 per cent in the last five years, so it's very possible to gain a million in property value over 20 or 30 years,' Mr Cooke said.
However, the same market conditions mean many young Australians feel locked out of buying property, meaning their superannuation will likely be their largest asset.
For those who want to be more adventurous, the rewards can be great but the risks are too.
'Of course, there are much faster ways to become a millionaire,' Mr Cooke said.
'If you had purchased $660 worth of Bitcoin in 2012, that would have been worth $1 million in December last year.
'Of course, if you'd bought that $1 million worth of bitcoin in December, it would be worth less than half of that today.
'The high reward comes with high risk, so my advice would be to steer clear.'
It is still possible for late starters to retire with a million dollars in superannuation or savings