Earn a million more for retirement with this simple move
Young people tend to have a set and forget approach to retirement because it’s so far away, but by making the effort to increase your retirement savings just 1% per year, you could retire with more than a million dollars. We all want to retire to a picturesque beach and with this tip, you can do it.
Proof Is In The Numbers
If you save 6% from the outset, then you’ve got a good start on retirement, but give a little extra each year you could hit retirement a millionaire.
For example, if you’re a 22-year-old professional making $60,000 a year, then you’ll end up with $827,000 at 67 (assuming you earn 6% on investments). If you bump that up 1% each year until you reach 20%, then it increases to more than $2 million. That’s a comfy way to spend your golden years.
Don’t Get Distracted
The 1% extra per year isn’t a lot of money, but many people have difficulty taking it out anyway. We like to spend money and retirement is so far away, so why should we put it away?
You could use that 1% to buy Starbucks or eat out, but instead, try to save and don’t get distracted. Every year on your birthday give yourself a gift for the future and add that one percent to your retirement fund.
Tips For Late Investors
The model is based on someone that has about 45 years until retirement, but what if you don’t have that long? Life happens and many people can’t invest in their future until much later. Families, medical issues, and other problems can leave you with little money left over for investment, but that doesn’t mean you can’t still be a millionaire at retirement.
If you begin retirement investing at 35, then 6% won’t leave you with a million. Instead, start by investing 10 or even 15 % and increase it by one percent each year. Check with your employer and see if they match up to a certain percentage.