I'm 40, just divorced with $85,000 income and nothing saved. Can I really become a multimillionaire by 65?

A divorced caller with 21 years of marriage and $85,000 annual income had almost no savings and asked about being okay by age 65. A projection assumed investing about 15% of income, roughly $1,000 per month, with no raises and no employer match, compounding to about $1.4 million by 65 at a 10% annual return. Higher returns could raise the total toward $1.6 to $1.8 million, with $2 million possible under strong growth. The 10% return assumption aligns with long-run U.S. large-cap stock averages and is conservative versus recent S&P 500 performance. Inflation reduces purchasing power substantially over 25 years, so $1.4 million nominally may buy about half as much in today’s dollars.

"“The biggest thing you have to overcome is not the mathematical challenge of being okay by age 65, because that's a laydown. We can definitely are going to be fine. You're going to be a multimillionaire.”"

"“Investing 15% of $85,000, roughly $1,000 a month or $15,000 a year, with no raises and no employer match, compounds to about $1.4 million by 65 at a 10% annual return. Push that return to 11% or 12% and the figure climbs toward $1.6, $1.7, or $1.8 million, with $2 million possible if growth runs hot.”"

"“The 10% assumption holds up against the historical record. The S&P 500 ETF SPY returned 257% over the past ten years, which works out to roughly 13% annualized before inflation. The long-run historical average for U.S. large-cap stocks sits closer to 10%. So the projection is conservative against the last decade and roughly in line with the last century.”"

"“Here is the catch the host glossed over. CPI just printed 332.4, with monthly inflation running at 0.6%. Over 25 years, even 2.5% inflation cuts purchasing power by roughly half. A nominal $1.4 million at 65 buys what about $750,000 buys today. Still life-changing for someone starting at zero. Just not Bentley money.”"

Read at 24/7 Wall St.