Who wants to be a millionaire? How about retiring as one?
Have you dreamed of retiring a millionaire? Who hasn’t? It’s not as much of an unattainable goal as one might expect, but to retire with a million in the bank takes a great deal of planning and good advice from financial professionals who are focused on your goals right along with you.
Many of our clients are small business owners working, like you, to save for a comfortable retirement. Our resources tell us that a diversified portfolio which includes consistent savings, term and whole life insurance as well as long-term, high-return investments are your best path to financial security in retirement. They also strongly recommend beginning to save as soon as possible. For most people, there is no such thing as a ‘get rich quick’ investment opportunity and prosperity takes time, commitment and consistency in saving.
For example, suppose you start out with $250,000 cash invested at age 45 and contribute $2,000 per year to that account over 30 years. You’d have an ending balance of $1,055,151 which would give you a monthly income of around $2765 through age 95, if you retire at 65. That number is adjusted for 3% inflation, a 7% rate of return before retirement and a 4% return after. Without the quarter-million startup money, the end amount would be significantly lower because the full amount of return is based on how much you start out with, the total account value and the level of contribution and growth.
First, be aware that GLD Enterprises Commercial Writing does not offer financial planning or legal services and none of our principals is a licensed financial expert. That said, the following is a general summary of information on how to save for retirement and you should consult your own wealth manager to develop the plan best suited to you. Here, for your information, are 10 tips towards your financial security.
10 Tips For Retiring As A Millionaire
- Set the Goal – No one plans to fail, they just fail to plan. Yes, it’s cliché, but it’s also true. Most people simply never sit down and make the decision to set a goal and lay out the steps needed to meet it. Your goal should depend on how much money you’d like to have to live and play on after retirement.
- Start Saving – There is no time soon enough to start socking away your nest egg. To reach the one-million-dollar mark by retirement at 65, a 20-year-old person today needs to save $361 per month. At 25 years of age, that number goes up to $499. The older you get, the more you’ll need to put away and the later you start drives that amount higher exponentially.
- Be Aggressive – Fixed income investments and Certificates of Deposit are safe but not very fruitful. Often, higher risks and higher return investments may be necessary.
- Build A Rainy Day Fund – Along with your standard retirement savings, you should amass a rainy day fund equivalent to at least 6 months of your living expenses in the event of unforeseen problems; job loss, illness, injury, etc.
- Increase Savings – Every time more cash comes into your possession (ie: a raise at work, some kind of long-term windfall) you should increase the amount you are saving.
- Watch Your Spending – It’s entirely possible, that this should have been tip number 1. Sometimes when people start saving, they forget about how much they’re spending, above and beyond the necessities. Track every penny and be aware of how much you are using for entertainment, shopping sprees etc.
- Monitor Your Portfolio – Long term investments don’t necessarily need constant surveillance by the investor, but it’s a good idea to keep your eye on your portfolio. Regular discussions with your financial professional or investment manager can help you stay on top of things and adjust with changes in lifestyle or economic situation.
- Max Out Contributions – Max out all of the allowed contributions to tax-deferred savings plans
- Stay Focused – Try to avoid “get rich quick” talk or anything else that sounds too good to be true. Just because a high-risk investment worked for your friend Bob, that doesn’t mean you should do it too. Consult your professional advisors for assistance.
- Be Patient – (And Diligent) Retiring a millionaire is not completely unattainable but it depends on your circumstances and a certain level of patience, diligence and commitment. It means you may have to forgo that weekly trip to the movies or expensive monthly dinner out.
There are lots of other ways to add to your financial stability such as selling off excess house wares and collectibles or taking a second job. But however you get the money, the most important thing is to save it, consistently and for the long term.
Here’s a free online calculator from Western & Southern Life that can show you what it might take to reach your goal: https://www.westernsouthernlife.com/education/financialtools/retirementincome/
We can recommend these local financial professionals to help you achieve your retirement goals:
Curt Warner – Western & Southern Life: Call 937-527-0195
Anna Osborne – Western & Southern Life: Call 937-280-8096
Watch the TV interview with Gery on WDTN’s LIVING DAYTON …