When it comes to personal finance, many people want to have $1 million in assets before retirement. But some millionaires say other milestones are way more important than reaching that figure.
What’s more important than saving $1 million?
A recent CNBC report cited an Ameriprise Financial study that found only 6% of retirees with $1 million or more said nothing beats hitting that target. But for others, these five milestones were more significant to them:
- Being able to retire
- Paying off the mortgage
- Being able to pay cash for a new car or other purchase
- Paying for a child’s education
- Reaching a certain annual income level
As someone with Ameriprise told CNBC, retirees care more about what their money helps them do than the dollar figure itself.
How much do you need to retire?
This is so important because $1 million might not be your magic number.
To get a rough estimate of what you’ll need for your ideal lifestyle down the road, assess your current budget and projected spending in retirement – and plug your numbers into an online retirement calculator. Here are a few free options:
These tools can help you plan for the future, including your retirement age.
Lessons from a man who retired at 33
We recently introduced you to Justin of Root of Good, a man who retired at age 33 after saving $1.4 million – and raising three children with his wife!
Will that money last forever? Justin doesn’t seem to be worried. He believes in the 4% rule, which says you can preserve your principal for years to come if you only withdraw up to 4% each year.
Watch Clark’s interview and read more about how Justin managed to retire so early in life.
Will you be ready for retirement? Here’s your action plan!
As Clark has mentioned so many times on the radio show, the key to building a retirement nest egg is saving early and often. In a recent survey, retirees had this advice for younger generations:
1. Start saving early in your career
It doesn’t matter what your starting salary is, your retirement goals are within reach.
Wells Fargo shared how someone earning a $32,000 salary at age 25 can wind up with $1 million at age 65 by investing and increasing their savings rate over time.
2. Find small ways to save
If you’re struggling to save, start by putting away just one penny (1%) of every dollar you make.
Things like switching to a low-cost cell phone carrier, shopping at a discount grocery store and even negotiating lower bills with your existing service providers can free up lots of money.
Here are 21 ways to cut costs and save more every month.
3. Maximize workplace retirement programs
Most companies are no longer offering pensions. If your employer offers any type of match on your 401(k), take advantage of it. Otherwise, you’re leaving “free money” on the table.
Read more: #1 way to maximize your 401(k) savings
4. Delay Social Security if you can
If you start collecting Social Security at age 62, you’ll get reduced benefits. Those who wait until they’re 70 get the maximum benefit. Use this tool from the Social Security Administration to see where you stand.
More Clark.com resources: