How a 25-year-old making $32,000 a year can retire a millionaire

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How a 25-year-old making $32,000 a year can retire a millionaire
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When it comes time to retire, do you think you’ll have $1 million saved up? Most millennials aren’t optimistic, according to the Wells Fargo Millennial Study.

A survey of 1,000 U.S. adults between the ages of 22 and 35 found that 64% of them say they’ll never be able to accumulate $1 million in savings. While most have started saving, those who haven’t say they just don’t make enough.

Read more: How I paid off my $86,000 mortgage in 2 years

How millennials can retire as millionaires!

As Clark has mentioned so many times on the radio, the key is to begin saving early, even if it’s just 1% of your earnings to start. But it’ll take more than that to reach $1 million.

How much exactly? Wells Fargo did the math.

If someone earns a $32,000 salary at age 25, saves 5% during their first year and increases their savings by 2% each year (up to 13%), their investments in the market could grow to $1 million by age 65.

This example assumes a 7% annual return on the invested money, plus a 2% yearly pay increase.

How a 25-year-old making $32,000 a year can retire a millionaire

Thanks to the power of compound interest, the money you save now is worth a lot more than the money you save later.

So where do you find the money to invest? Start budgetingAbout half of the millennials surveyed have a budget, which can help you reduce spending and allocate that money to your 401(k).

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Here’s more on creating and maintaining a budget.

Here are some more ideas to get you started:

If these ideas aren’t for you, you could put your energy into making more money instead.

Read more: The #1 way to stop living paycheck to paycheck

Final thought

When you’re just starting out, saving $1 million for retirement is probably the last thing on your mind, especially if you’re living paycheck-to-paycheck or burdened by student loan debt.

But this study shows that it doesn’t matter what your starting salary is, your retirement goals are within reach.

And if you’re not a millennial, you can retire a millionaire as well if you start saving. We have an age-based breakdown of how much to save each month.

Read more: Clark’s investment guide

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