If You Make This Move in 2024, You Might Become a Millionaire By 2054

You might think it's just a select few retirees who are able to kick off their golden years with $1 million or more in savings. But data from Fidelity finds that a fairly large number of people are retirement millionaires.

As of the second quarter of 2023, a good 378,000 employer-sponsored 401(k)s had a balance of $1 million or more. Meanwhile a little more than 349,000 IRAs had $1 million or more in assets.

If you're eager to retire as a millionaire, you might assume it's going to take a super-large salary to get there. But actually, if you have time on your side, then you might manage to become a retirement millionaire without chasing a six-figure job. The key is to simply get into the habit of saving and investing for that milestone as soon as now.

Commit to your IRA or 401(k) in 2024

A lot of people who end up millionaires in retirement aren't wealthy throughout their careers. Instead, they're modest earners who commit to saving for the future over a long period of time.

If you've yet to start funding an IRA or 401(k) plan, then make 2024 the year you start. You may be amazed at how much wealth you can grow if you contribute to that account steadily over several decades.

Let's say your goal is to retire in 2054 with $1 million to your name. Want to know what monthly contribution to a brokerage account it might take to get there? It's $507, provided you start in 2024.

Of course, this makes an assumption -- that you're going to invest your long-term savings in stocks, and that your portfolio is therefore going to deliver an average annual return of 10%. That 10% isn't just an arbitrary number, though. Rather, it's consistent with the stock market's average over the past 50 years.

The longer you wait, the harder it gets

Coming up with $507 a month for retirement savings purposes won't necessarily be easy. But if you earn $50,000 a year, you're basically saving 10% of your income. If you earn $75,000 a year, you're saving more like 8%. The longer you wait to begin funding your IRA or 401(k), though, the more money you might need to part with on a monthly basis to reach that $1 million savings target.

Let's say that instead of beginning to save and invest for retirement in 2024, you begin 10 years later. When you narrow your window to 20 years instead of 30, a contribution of $507 a month only allows for a balance of about $349,000, assuming the same 10% return as above. If you're getting a 10% return on your money and only have 20 years to build wealth, it'll take a monthly contribution of $1,455 to get to $1 million.

That's a lot of money to save on a monthly basis. It's also more than you're allowed to contribute to an IRA. And unless you're a super high earner, it's probably not feasible.

So rather than fall short of your goal or put yourself in a position where you might have to part with a third of your paycheck to meet it, start saving and investing for retirement ASAP. You'll be thankful you did in the long run.