Working towards your retirement can be an incredibly rewarding achievement. Even more so when your 401(k) reaches upwards and over $1 million! Recently, the number of retirees that have reached that million dollar mark has increased from 89,000 to 133,000 in just the third quarter of 2017. Women also seem to be the ones bringing home the bacon, or in this case, saving the bacon. Over the past decade, the percentage of female 401(k) millionaires has doubled; going from 10% to 20% according to Fidelity reports.
So how does one come about being a 401(k) millionaire? The answers may be simple, but it requires a lot of work.
1. Save! Save! Save! The increase in these high-rolling retirees comes from a recent market run-up, but it comes down to setting aside money for future endeavors. Saving money and setting it aside for a rainy day can quickly turn into a retirement fund if handled correctly. It could quickly take an entire career to save up enough for retirement, but that's what you work towards. Putting aside that little extra every paycheck can really make a difference at your career end.
2. Don't be afraid to put your money in different outlets. Investing is a great asset to building up a 401(k), and you shouldn't be scared to spread your money out in your company if they offer stock. Skirting away from stocks to dance with bonds could potentially short-change you in the grand scheme of things.
3. If your company offers a match, take it! Not very many companies take part in a full match of your investment in your 401(k) due to auto-enrollment at a lower level than the matching ceiling. That being said, if your company gives you the change to match, make sure you take full advantage of it. You can change that auto-enroll issue by increasing your savings, working your way up to that level. If your savings is at 5%, bring it to 20% by the end of the year.
A good sight to keep in mind is taking your annual income and multiplying it by 10; this will give you a good indication if you will reach that millionaire status by retirement. Not many jobs will offer an annual salary of $100,000 but with savings and investments throughout your career, it's not just a dream anymore!
Contact West Financial Group for guidance on planning your ideal financial future!