You Won’t Believe How Many Americans Retire With $1 Million or More

Retiring a millionaire isn’t what it used to be.

Living costs have risen substantially over the years. So now, while a $1 million nest egg certainly does not make you poor, it doesn’t necessarily make you rich, either.

Still, a lot of people have the goal of retiring with at least $1 million. And you may be wondering how many retirees actually manage to achieve that goal.

The number is surprisingly small. Only a little more than 3% of retirees have $1 million or more in retirement savings.

If you want to set yourself up for a $1 million nest egg, it’s important to have the right strategy. Though a relatively small percentage of Americans meet that goal, with a solid approach, you can join their ranks.

First, start saving early

One of the most important things you can do if you want to retire with $1 million or more is begin contributing to your nest egg at a fairly young age. In fact, you should ideally start funding an IRA, 401(k) plan, or the account of your choice as soon as you begin collecting a steady paycheck.

Some people wait until their 30s or 40s to begin saving for retirement. They put off retirement plan contributions until their salaries are higher and they’re more settled in general.

The longer you wait to begin saving for retirement, though, the less time you’ll give your money to grow. If you want $1 million or more, aim to begin saving in your 20s, or whenever you begin working full-time.

Next, make sure you’re investing strategically

Saving for retirement isn’t necessarily going to get you to $1 million. If you want to reach that milestone, be prepared to invest your money aggressively for maximum growth. That means braving the stock market and its volatility.

Of course, there are steps you can and should take to minimize the risk of investing in stocks. These include:

• Maintaining a diverse mix of investments
• Researching stocks thoroughly before adding them to your portfolio
• Falling back on broad market or sector-specific ETFs if you’re uncomfortable choosing stocks individually
• Checking up on your portfolio regularly and rebalancing as needed

This isn’t to say that your portfolio won’t lose value from time to time due to market events. However, if you make the above moves and stay invested in the market for many years, there’s a strong chance you’ll come out ahead.

Your path to $1 million in retirement savings

Now that we’ve reviewed the two main things to do to reach $1 million in retirement savings, let’s put the numbers to the test.

First, let’s assume you begin saving for retirement at age 25. Next, let’s assume you build a portfolio of stocks that generates an 8% yearly return, which is below the market’s historical average.

If you’re able to save $325 a month, then you could end up retiring with just over $1 million. Make it $425 a month, though, and your portfolio may grow to over $1.32 million.

Even though a pretty small percentage of Americans retire with $1 million or more, if you commit to that goal early on, you can set yourself up to reach this very impressive savings milestone.