How to Retire a Millionaire
So you want to be a millionaire. It is possible when you take the time to plan for the future. It starts early for some and later for others. The younger you are the easier it will be to reach your dream. Depending on the age you start, you will need to save money each month to reach the goal of becoming a millionaire.
The following information shows four ages that you may use to calculate the amount you have to save each month depending on your current age or the age you will be when you start saving. The amounts increase with age so it is important to start the savings at a younger age. You will also want to stay away from high interest credit cards and try to find a credit card with a very low interest rate.
At the age of 25 without any money saved, you will need to save $286 per month. To successfully save you can contribute to your 401K plan with your employer's contributions adding to each contribution you make. If you do not have a 401K then start an IRA for your retirement savings. You will invest in your retirement for thirty years so you can afford to keep all of you account in stock options. Two more things to do to save money are to pay down all of your credit cards and other high interest loans. Set up an emergency fund to allow for six months of your monthly earnings so you have a back-up plan for possible emergencies. This will allow you to have more money to put away for the millionaire status you are striving to reach.
At the age of 35 without money saved, you will need to save $671 a month. You may be at the point in your life where you are either starting a family or buying a home. Begin by balancing your short-term needs with the long-term retirement goals. You may have other obligations but you still need to plan for your retirement. Plan to save 15% of your gross annual income by putting it into a 401K and allowing for your employer's match contributions. Change your assets to 10% bonds and 90% stocks for a higher savings and earnings. Invest in a 529 college savings plan that offers a tax reduction on your contributions to the savings account including an exemption for federal taxes.
At the age of 45 without a savings, you will need to save $1,698 a month. At this point, in your life you may be dealing with a growing family or aging parents yet your retirement is still important. Contribute $15,500 to your 401K annually or another type of retirement plan. You can contribute $5,000 to your IRA each year. Roll over the retirement savings from a previous job into the IRA to higher yields on the savings. Change your current stock allocations to be 20% bonds and 80% stocks. Your children can get grants or loans for the college costs but you need to plan for your retirement since there are not any other methods to pay for your Golden Years.
At the age of 55 without a savings, you will need to save $5,466 a month. Take advantage of the higher rates of income you are currently earning by stashing away money now for your retirement. Add another $5,000 in catch-up contributions to your 401K savings and $1,000 to your IRA that is allowed for people in this age group. Change the allocations of your retirement to 30% bonds and 70% stocks. Begin estimating the retirement expenses and projected income to make sure you will have enough for retirement. If you are not going to have enough money, then you may decide to work a few more years until you are able to retire comfortably.
How to Retire a Millionaire
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