Do you dream of retiring as a millionaire?
Is it a farfetched idea?
Believe it or not, it can be achieved. All you need to do is save, invest, and set the right plan. When you have the goal of retiring as a millionaire, you need to plan how to achieve this goal.
The fact that many do not know is how many people are retiring as millionaires, and the record level has reached a new set high.
Retire as a Millionaire
The question that arises is:
How can you retire as a millionaire?
We have three steps that you can follow to retire as a millionaire.
Save, Save, Save from Early on
No matter what financial goal you have, savings is the key to it.
Savings are a way to reach the dream of retiring as a millionaire. However, when it comes to retirement savings, it is not about how much you save but when you start saving.
According to experts:
“The biggest asset for any financial saving is time.”
You can start by putting 10 to 15% of your income aside for your retirement fund. If that is too high for you, do not give up. Save any amount you can. Putting any amount in your retirement fund will get you ahead significantly in reaching your retirement as a millionaire goal because of the compound interest.
So, what is compound interest?
The money you invest initially will grow with time, including the interest you get, with compound interest.
This is why you have to start saving as early as possible. A significant amount of wealth can be created by compounding. Therefore, if you can put just a few hundred dollars in your retirement fund, do it and see it grow and add up with time.
Choose a Number Based on your Age
Once we have the savings, the next important thing is setting a plan to reach the retirement goal. Most of the time, people do not have a retirement plan.
This means that people save for retirement by putting some money into an account, but they do not track it or know whether the amount they are saving is a lot, too little, or perfect.
The question is:
How much does one need to save?
The amount you need to save depends on when you begin saving. Below are a few saving age scenarios a financial expert provided on how to retire as a millionaire, depending on your start age.
Let us say you start at 20 years old.
Assuming that the monthly compound is 6%. You will have to put $364 into your retirement fund each month to get the savings to reach $1 million by the time you are 65 years old.
Let us say you start at 30 years old.
Assuming that the monthly compound is 6%. You will have to put $704 into your retirement fund each month to get the savings to reach $1 million by the time you are 65 years old.
Let us say you start at 40 years old.
Assuming that the monthly compound is 6%. You will have to put $1,444 into your retirement fund each month to get the savings to reach $1 million by the time you are 65 years old.
That gives an idea of how you need to set a plan. You need to set the age by which you wish to retire and how much the compound monthly return is and see how much you need to put into the retirement fund each month based on the start age.
Invest
Now that you know you need to save, how much, and have a plan in place, what do you do next?
You start investing regularly.
Investing is another way to get to the retirement fund goal you have. What you do with the money you have saved will settle how quickly your wealth will get built. Many banks give an average of only 0.03% APY for savings accounts.
However, the money can go a lot further if you invest it. For example, a way to invest your money is in stocks. Stocks are a way to build the money you need to retire quickly and comfortably. Many financial advisors suggest putting money into stocks and bonds for your retirement to diversify your retirement portfolio further.
Final Thoughts
The age, the amount, and investment all link to a person’s retirement portfolio. The younger you plan your retirement, the more benefit you get in investing and saving your money. Retiring as a millionaire was impossible, maybe years ago, but it is achievable nowadays.
Are you one of those people who wish to retire as a millionaire?