BOSTON (CBS) – $1 million! We are going to spend the week figuring out how to have a $1 million saved by the time you retire. And we’ll do it by decades.
According to a recent article on CNBC there are more millionaires than ever before, almost 11 (10.8) million nationwide. So what are the rest of us going to do if we have not saved that $1 million?
Well I found another article in Time magazine last week which explores the good life seniors are having living in a trailer park in central Florida because they never got around to saving that $1 million.
My goal for most of you would to be somewhere in between. I do workshops around the country on retirement planning and most folks I speak to wish they had saved more for retirement.
Any savings makes life in retirement better. For most their savings income supplement their Social Security benefits and pension.
And the best bet to having $1 million when you retire is to start in your 20s! A 401(k) contribution of $2,000 a year, $40 a week started at age 20 and continued for 47 years with an average 8% return over those 47 years (which is realistic) you could be a millionaire at retirement.
You will have contributed $94,000 to the account over the years.
Most twenty-year-olds do not have retirement planning on their radar screen though. These are the accumulation years. They get that first job and they want stuff. Nice stuff! The flat screen TV, Smart Phone kind of stuff.
Staying out of debt is key to achieving financial success in your 20s. Starting to save for retirement is also a big part of that success. The key years for retirement savings are between the ages of 20 and 35.
The average twenty-something is digging themselves into a black hole of debt they may not get out of for many years. Add all of this accumulation debt to school loans which averaged $30,000 last year and you have a formula for disaster.
A good website for help keeping track of your finances and budget is www.mint.com.
You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.
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