If you’re young, preparing for retirement may seem premature, but start saving smartly now and you could be a millionaire before you retire. If you’re one of those with 401(k) that has far less than $1 million in it, Roger Wohlner, The Chicago Financial Planner, has 7 tips to become a 401(k) millionaire:
- Be consistent and persistent
- Contribute enough
- Take appropriate risks
- Don’t assume Target Date Funds are the answer
- Invest during a long bull market
- Don’t fumble the ball before crossing the goal line
- Pay attention to those old 401(k) accounts
How To Become A 401(K) Millionaire In 3 Simple Steps
Becoming a 401(k) millionaire is within reach to many young savers. Here are three simple steps to achieve your goal of a million dollars in your 401(k).
1. Save a Lot
You should try to save at least 15 percent of your pay to your 401(k) every year. If you’re not there yet, at least contribute enough to meet your employer match. Every pay raise, try to increase your contribution.
2. Start Early
The best time to start saving in your 401(k) is now. Time is on your side. When you start saving at a young age, your money has a longer period to compound. According to Fidelity, 401(k) millionaires generally started saving at age 25 and plan to retire at 67. The earlier you start investing the more time your money will grow.
3. Invest with Discipline
Create a plan and stick with it. Since you are young, don’t shy away from stocks, both domestic and international, in your investment portfolio.