How Many People Actually Reach Retirement Age With $1 Million? Many Americans consider reaching the age of retirement with a net worth in the millions their biggest goal in life. Retirement with a million dollars in your bank account will strongly support you and your family financially, despite the rapidly rising inflation. Achieving a million-dollar net worth in recent years is gradually becoming more and more common. However, considering the rising living costs, it is still a goal that requires prior strategic planning to be reached. If you are someone who wants to achieve this goal and retire with $1 million, this article is for you. It brings you everything you need to know about how you can actually retire with $1 million in your account.
How Many People Actually Reached Retirement Age With $1 Million In The USA?
The Federal Reserve is the one offering the most accurate data about exactly how many Americans could actually reach the retirement age with $1 million. It conducts a Survey of Consumer Finances every three years, in which important questions about their demographic and financial details are asked. According to the last survey, around 18% of American households actually have a net worth of $1 million. However, this data includes all the individuals in the age group ranging from 18-95 years. Among them, if we look at the families whose leader is approaching the age of retirement, roughly 16.3 million citizens of America are millionaires.
How Can You Retire With $1 Million?
According to the analysis of the data the Federal Reserve has provided, it is safe to say around a quarter of the US families successfully secured a net worth of $1 million. This definitely indicates that a million-dollar net worth at the time of retirement is a goal that is not impossible to attain. Citizens who actively save for the future and invest smartly can definitely retire with $1 million. The following are a few ways you can attain your goal.
Pay Off Loans At The Earliest
In case you have any kind of high-interest debts on you, including credit cards or loans, your topmost priority should be to pay them off at the earliest. Most of these credit card debts and loans charge around 30% interest per year. You can actually invest all the money you are paying as interest and get a return that will help you build your fortune.
Matching 401(k) Contribution
In case your employer is offering a matching 401(k) contribution, it is definitely your best bet to start saving for the time of your retirement. Even though the options for investment in your place of work are not great, or it charges a very high fee, it can still be considered worth securing the match.
Tax-Advantaged Retirement Accounts
If your employer isn’t offering any retirement plan, you may go ahead with any kind of tax-advantaged retirement account available. An IRA or Roth IRA is actually another great option to save up enough money for the time of retirement. This is mainly because you will not have to pay any kind of taxes on capital gains or dividends in this type of account.
Smart Investments
Making smart investments is another way you can attain millionaire status upon reaching the time of retirement. You can either buy individual stocks and take advantage of any market opportunity, or simply go for a low-cost, broad-based index fund. The S&P 500 index is known for charging only 0.03% of assets, providing a diversified portfolio matching the returns of the index. You must start investing early on as this allows your investments to compound longer, grow bigger, and potentially make you a millionaire. Even if you are middle-aged, reaching millionaire status at the time of retirement is not impossible. You will just have to save more aggressively and maintain consistency.
Is $1 Million Enough to Retire at 55?
Whether a million dollars in your bank account at the age of retirement is enough or not depends widely on your style of living. In case you have a decent lifestyle like any other normal citizen, the amount should be more than enough. However, if you have a lavish lifestyle or in case you need extensive healthcare at that age, you might feel the need to save up more.
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