You don't need a six-figure job or family money to become a millionaire. Instead, you should start saving early and factor in every dollar you spend. Here are some tips for accumulating that million you need to retire in style or to retire early. You should consider allocating at least 20% of your income to savings, including retirement and any money you may need for a difficult day.
Exactly how much should you save? Although there's no right answer here, most financial planners say that, depending on your age, you should save at least 15% of your annual gross income if you want to save for retirement. This figure may seem unattainable to many, but in reality it is not. Suppose your employer matches contributions of up to 6% of your salary, you only need to save 9%. Planning for retirement can be very stressful, in part because of all the investment options available, not to mention all the unknowns that await you.
In fact, up to 60% of workers said they are uncomfortable with retirement planning. It's no wonder that only 25% of Americans say they're sure they're doing what they need to do when it comes to planning for retirement. That's why it's so important to have the help of a professional. Only 29% of Americans reported working with a financial advisor, while 65% said they weren't receiving any kind of financial advice.
Unless you're a financial rockstar, it's worth working with a qualified financial advisor. You don't get the initial tax relief. However, withdrawals that qualify during retirement are tax-free. They're done when you're 59 and a half years old or older and it's been at least five years since you first contributed to a Roth.
The easiest way to become a millionaire is to take advantage of capitalization and start saving money as soon as possible. The sooner you save, the more interest you'll accrue. And you'll earn more money with the interest you earn. You should aim to earn at least 15% of your income.
Publication 590-A (201), Contributions to Individual Retirement Plans (IRAs). The truth is that you don't need to develop the next technological unicorn or be a celebrity to become a millionaire. In reality, most millionaires are regular people, and not all of them take home six-figure salaries. With a little common sense and discipline, you too can become a millionaire with an average income.