Here's How Much You'd Need to Invest in an S&P 500 Index Fund Each Month to Grow Your Portfolio to $1 Million Within 30 Years

There's no one right way to invest in the stock market. You can invest a big lump sum and watch it grow over time, or you can also make periodic investments. Ideally, it could even be part of a monthly process, where just like paying bills, you routinely commit to investing in stocks.

The natural objection is that you may not have time to track the stock market. But historically, the S&P 500 index, which is a collection of the leading stocks in the world, generated returns of 10% per year (on average). By just putting money into the SPDR S&P 500 ETF (NYSEMKT: SPY), which tracks the index, it can be an easy move to make every month.

Making monthly payments can build up your portfolio and potentially put you on track to retire with at least $1 million. If you have at least 30 investing years left, here's a look at how much you'd need to invest each month into an S&P 500 index fund like the SPY ETF to reach $1 million.

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How much would you need to invest each month to get to $1 million?

If you're making monthly investments in the stock market, you may not need to make a big lump sum investment right away. But in exchange for that, you'll need to have plenty of investing years to go. Otherwise, the monthly investment amounts could be too significant for the $1 million target to truly be attainable.

The biggest factor in determining how much to invest is unfortunately one that's impossible to predict -- your average annual return. This year, for example, the S&P 500 is punching above its weight with a 15% return that's above its long-run average. And in each of the previous two years, it was up by more than 20%. It would be nice to assume these kinds of returns will be the norm in the future, but the reality is that a slowdown may be inevitable as the economy is on shaky ground these days.

If you have around 30 investing years to go, then here's how much you should aim to invest, based on varying expected annual returns.

Calculations and table by author.

You can look at this table as really a range, to give you an idea as to how much you'd want to aim to invest each month. A monthly investment of $353 would be sufficient but only under ideal circumstances, whereas if you want to give yourself more of a buffer and safety net, then planning to invest $542 could be a more appropriate target.

Why investing in the S&P 500 can be a no-brainer option

For many people, these may still be high amounts to afford to invest in the stock market each month, and they may even be discouraging.

However, investing regularly in the SPDR S&P 500 ETF or similar S&P 500 funds can still be an excellent habit to get into, to build up your portfolio's balance so it becomes as large as possible. And if your financial situation improves and you're able to invest a lump sum later on, that can make up for making smaller investments earlier on. At the end of the day, you're likely to be much better off investing the money into an ETF like SPY than to have your money sit in a savings account at the bank, where it may earn just a nominal savings rate.

Regardless of your outlook for how well the market may perform in the long run, putting money into an S&P 500 fund on a regular basis can still be a great way to save for retirement and put yourself into a stronger financial position in the future.

David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.