Here Are 2 Ways to Save $100,000 in 10 Years

If you're saving for the future, one factor is always on your side -- time. The longer your investments have to grow, the bigger your returns will generally be. While stock market performance and interest rates on CDs can vary (and past performance is never an indicator of future returns), over time, those investments typically grow in value.

Saving $100,000 might sound like an unrealistic goal, but it might be easier than you think. If you have at least 10 years to work, save, and invest, you can build a substantial nest egg. If you can't save quite this much, that's OK. You'll still see how saving and focusing on long-term returns can help you build savings over time.

Let's look at two different ways you can save $100,000 in 10 years. And if you're able to do both, you could save $200,000 in 10 years.

1. Max out an IRA with investments earning at least 8% annually

IRAs provide tax advantages to encourage retirement savings and can be opened at nearly any banking institution. The best IRA accounts allow you access via desktop or mobile device, plus they offer low fees and multiple types of investments, including stocks and index and mutual funds.

Our Picks for the Best High-Yield Savings Accounts of 2024

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.80% Rate info 3.80% annual percentage yield as of December 28, 2024. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.80% Rate info 3.80% annual percentage yield as of December 28, 2024. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.46% Rate info The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

According to the IRS, the maximum amount you can put in an IRA each year is $7,000 if you're under 50 and $8,000 if you're over 50. That means to max out your IRA, you'll need to save $583 per month. If you earn an 8% average rate of return, you'll have $42,123 after five years. After eight years, you'll have $74,243 saved -- and after 10 years with regular contributions and 8% returns, you'll have socked away $99,135 in your IRA.

Don't forget that if your modified adjusted gross income is below the income requirements, you can contribute post-tax dollars to a Roth IRA, which will allow your retirement savings to grow tax free.

Now, let's talk about that 8% growth rate. There are multiple mutual funds and stocks that have historically earned 8% or more per year. Mutual funds and index funds generally see similar growth, though your choice of investments will depend on your overall goals and risk tolerance.

2. Put $700 per month into an investment earning 4% annually

Maybe you already have your IRA savings or you're looking to save $100,000 outside of your retirement accounts. The second way to save this amount is to save $700 per month in any banking product that earns at least 4% interest per year.

Let's look at the numbers. Saving $700 per month will result in a savings of $8,400 per year. After five years, you'll have saved $46,099, and after eight years, you'll have $77,355. By year 10, you'll hit $99,852 in savings.

The beauty of this approach is that it doesn't require any increase in savings. Income tends to go up over time, but you don't even have to increase your savings rate to hit the $100,000 mark. That's because the true power of investing lies in giving your money time to compound as the years go by.

Now, how do you make sure you hit that 4% return rate? Multiple banking products have historically hit that 4% interest rate. Many high-yield savings accounts and CDs earn higher than 4% interest, for example. Stocks and mutual funds may also earn 4%, depending on the year and type of investment.

Put the power of long-term investments to work for you

Both of the strategies we've discussed offer a viable path to saving $100,000 in 10 years. Even if you're not able to save the amounts discussed above, you can still build savings over time by saving consistently and investing in accounts that allow your money to grow.