13 Steps Average Americans Should Take to Retire a Millionaire

Published:

Retiring a millionaire might seem like a far-fetched dream. However, you can achieve any financial goal with the right strategy and discipline. Taking a few steps could help you attain seven figures by the time you retire.

Here are some 13 surprising steps to take to retire a millionaire.

Start Saving for Retirement Now

Senior mature business woman holding paper bill using calculator, old lady managing account finances, calculating money budget tax, planning banking loan debt pension payment sit at home office table.
Image Credit: Ground Picture/Shutterstock.

 

Whether you’re 40 or in your early 20s, it’s never too early to start saving for retirement. The earlier you start saving, the more compound interest you’ll accumulate when you retire. Starting early allows your money to grow over an extended period. Remember that it’s not too late to build wealth, and you can start now and still retire as a millionaire.

Maximize Your Retirement Contributions

Portland, OR, USA - Dec 3, 2021: The 401(K) Plans page on the IRS website is seen on an iPhone. 401(k) plans are employer-sponsored defined-contribution pension accounts.
Image Credit: Tada Images/Shutterstock.

 

You can build a sizeable retirement nest by maximizing your retirement contributions. Some employers offer a match on your retirement plan contributions, which is free money that can boost your retirement savings. Ensure that you contribute a similar amount to what your employer is contributing.

Understanding the type of retirement accounts available to you is also essential. For example, Roth IRAs require contributions to be made with after-tax dollars, but withdrawals in retirement are tax-free. With 401(K), you can contribute pre-tax income and reduce your annual taxable income.

Additionally,  if you’re older than 50 years, you get an extra $6,000 make-up contribution limit.

Diversify Investments Across Different Asset Classes

Business team investment working with computer, planning and analyzing graph stock market trading with stock chart data, business financial investment and technology concept.
Image Credit: Freedomz/Shutterstock.

 

Avoid being too conservative with your investment choices. Consider investing across different asset classes like stocks, mutual funds, real estate, etc. Find investments with a long-term track record and speak to a financial advisor if you need help determining where to invest.

Cut Down on Your Spending

Front view portrait of a smiling young woman standing in front of shelf display in glamorous boutique and holding red designer handbag.
Image Credit: Juice Dash/Shutterstock.

 

Small lifestyle changes can help you free up extra money that can help you retire a millionaire. Reduce unnecessary spending like getting expensive clothes or dining out every fortnight.  Avoid accumulating high-interest debt and focus on living below your means. Create a budget, pay off debt, and prioritize setting aside some money for retirement savings.

Pay Off High-Interest Debt

Financial owe, hand of asian woman sitting, holding credit card, stressed by calculate expense from invoice or bill, no money to pay, mortgage or loan. Debt, bankruptcy or bankrupt.
Image Credit: Kmpzzz/Shutterstock.

 

Any money you are spending paying debt is money you’re not saving. Focus on paying off high-interest debt quickly before retiring to free up your money.  After clearing your debt, you can now focus on building wealth. Use the extra income to save or invest in wealth-generating assets.

Reinvest Dividends

Dividends Stock Market Investments Ticker
Image Credit: iQoncept/Shutterstock.

 

Reinvesting dividends can help you maximize the growth potential of your investment portfolio. Avoid spending the dividends. Reinvest them back and purchase extra shares of the fund or stock to compound your returns over time.

Compounding can boost your portfolio’s value significantly.  Additionally, reinvesting dividends leads to automatic wealth accumulation.  as you steadily increase your ownership stake in profitable funds or companies. Review your investment strategy quarterly and consider reinvesting dividends as part of your wealth-building plan to retire a millionaire.

Think About Multiple Income Streams

Left Facing Red For Rent Real Estate Sign in Front of Beautiful House.
Image Credit: Andy Dean Photography/Shutterstock.

 

Considering other income streams can help you cushion your savings and retire a millionaire. Think about passive income opportunities that can help you generate income without requiring your dull-time participation. Passive income ideas like investing in a business, buying a rental property, investing in REITS, or investing in dividend index funds can help you retire as a millionaire. Always account for market fluctuations, tax, and initial risks when deciding what income streams to invest in.

Take Advantage of Employer Benefits

Health insurance web site modish registration system for easy form filling.
Image Credit: Summit Art Creations/Shutterstock.

 

Most employees overlook workplace benefits that can help them boost their wealth.  Take advantage of employer benefits like paid time off, health insurance, retirement plans, and more to save more money for retirement. Familiarize yourself with the coverage, details, and limitations of each benefit.  Use Health Savings Accounts to save for medical expenses.

Setup Automatic Contributions

Male executive using smartphone to conduct online mobile banking, investing in stocks and mutual funds, retirement investment ideas.
Image Credit: Thapana_Studio/Shutterstock.

 

Automating your retirement contributions makes saving for retirement easy, especially if your workplace has a 401(K) available. Alternatively, you can set up automatic deposits with your bank to ensure you don’t miss a contribution. Setting up automatic retirement fund contributions allows you to stick to your financial plans, prioritize saving, and account for investing in your budget.

Review and Rebalance Your Investment Portfolio

Business Communication Connection People Concept.
Image Credit: Rawpixel.com/Shutterstock.

 

While it can be stressful to monitor your portfolio, it’s essential to keep reviewing your investment portfolio to know where you stand. Assess the performance of your investments every quarter and invest in other better-performing assets.

Don’t Forget to Account For Inflation

A US one dollar bill lying below a newspaper headline news on inflation. Concept for the dollar buying power amidst rising goods prices due to shortages and increasing demand.
Image Credit: sweeann/Shutterstock.

 

A survey by Bankrate revealed that 55% of working Americans don’t feel ready to retire and are behind on their retirement savings due to market volatility and high inflation. Unfortunately, most retirees do not account for inflation in their savings to determine how much the money will last.

You can protect your retirement savings against inflation by diversifying income streams, being mindful of your spending choices, and rebalancing your portfolio to include high-interest bonds and inflation-proof stocks.

Consider Speaking to an Investment Professional

Happy young family at meeting in office signs document on purchase of real estate or loan agreement. Head of bank, realtor or financial advisor submits contract and indicates place of its signing..
Image Credit: Studio Romantic/Shutterstock.

 

Figuring out how to retire comfortably can be daunting, especially with all the investment and savings options available. Working with a financial advisor can help you determine the best retirement options and create a personalized retirement plan that allows you to retire in comfort.

Be Patient

Stop this. Angry senior man sitting on bench and rising finger.
Image Credit: Dmytro Zinkevych/Shutterstock.

 

Avoid falling prey to get-rich-quick schemes or scams that seem tempting. Speak to a financial advisor to clarify a specific investment opportunity. When investing, remember that the power of compounding takes time. Start investing early and accept that the road to riches can be slow and long.

Build Wealth

Cheerful man and woman with a drink outdoors. Wealthy couple together with a glass of wine.
Image Credit: Jacob Lund/Shutterstock.

 

Retiring a millionaire isn’t rocket science. With proper financial management, strategic investing, and working with an experienced financial planner, you can build wealth gradually and retire a millionaire.

10 Hard Financial Truths About Aging You Can’t Afford to Ignore

An elderly woman looks sadly out the window.
Image Credit: De Visu/Shutterstock.

 

Getting older is a difficult thing to face. Unfortunately, it also comes with certain financial considerations that will affect your retirement planning. Here are 10 hard financial truths about aging that you can’t afford to ignore.

10 Hard Financial Truths About Aging You Can’t Afford to Ignore

30 Super Simple Ways To Save Money at Home in 2024

Woman looking at a bottle of orange juice in a supermarket.
Image Credit: wavebreakmedia/Shutterstock.

 

Looking for some ways to save money at home? Now is the time to cut expenses, save some money, and keep your money in your wallet. Here are some simple ways to save money at home this year. Whether it’s as simple as switching what you buy when you go to the store or being a little more creative in the ways you use items in your home, maybe some of these ways will work for you!

Here are 30 ways to save money at home and put more in your pocket.

30 Super Simple Ways To Save Money at Home in 2024

20 Poor Hacks Frugal People Use on a Fairly Regular Basis

portrait of an elderly woman with beautiful look of Dominican Latin origin looking at the camera.
Image Credit: Julaix/Shutterstock.

 

Even if you’re not poor, you sometimes feel that way, and you probably have some tricks and tips for coping with that. In this article, we’ve compiled several poor hacks that people utilize at least a few times a month or even a week. It’s always good to share these hacks; we hope some of them help!

20 Poor Hacks Frugal People Use on a Fairly Regular Basis

28 Practical Ways Frugal People Save Lots of Money

Young pretty woman traveller in baseball cap looks and smiles at camera at green nature forest background, portrait close up.
Image Credit: DedMityay/Shutterstock.

 

Saving money doesn’t have to mean saying goodbye to life’s little indulgences. With a few smart tweaks, you can stash away cash for that dream vacation, rainy day fund, or splurge-worthy purchase without feeling like you’re on a constant budget patrol.

Think of it as a side hustle that pays off without the extra hours. Whether you’re looking to conquer debt or simply boost your bank account, these tips are guaranteed to put more money in your pocket, painlessly.

28 Practical Ways Frugal People Save Lots of Money

I’m Frugal: Here Are My Top 30 Frugal Living Tips to Save Money

Funny child hugs the radiator. Kid in hat and warm clothes enjoying home heater. Heating of housing during the energy crisis in the winter cold season. Restrictions and savings of gas and electricity.
Image credit: Sharomka/Shutterstock.

 

I’m super frugal, and one of my passions is sharing my frugal living tips with everyone.

Here are some of my absolute favorite frugal tips to help you get started on your journey to frugal living.

I’m Frugal: Here Are My Top 30 Frugal Living Tips to Save Money

Leave a Comment