This Tool Can Help You Save Money So You Can Retire a Millionaire
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If your #lifegoals include becoming a millionaire, you’re not alone.
Saving a million bucks is definitely doable, especially by retirement, but unless you’ve got a money tree growing in your backyard, you’ll need to come up with a strategy.
Opening a 401(k) retirement plan is a great way to start saving money for your future dreams, but there’s a catch.
It’s important to regularly check and tweak your 401(k) to make sure it’s working hard for you.
But who’s got time for that?
That’s where Blooom will help you out. This company is an SEC-registered investment-advisory firm that optimizes and monitors your 401(k).
Get Started With Blooom
Setting up an account with Blooom is a breeze.
Enter your information into its system: your name, age and when you hope to retire. Then connect your 401(k) account to receive a free “health report.”
The report lets you know what’s going well and what needs some improvement. It also checks to see if you’re paying any hidden fees and that your mix of stocks and bonds are properly allocated for your age.
If you want Blooom to take over, you can opt in for a $10-per-month service. You don’t even have to move your account; you just connect it to Blooom, and the company’s professionals will start managing it for you.
Within a few hours, Blooom will reconfigure your 401(k) without you doing a thing. And, better yet, it keeps an eye on it from then on.
How to Become a Millionaire
A savings goal of a million bucks sounds like a pipe dream, but if you plan wisely (and early), it’s very doable.
For instance, a 30-year old starting out with a $25,000 nest egg could retire by age 59 with $1 million dollars in their 401(k) just by contributing $5,000 per year with a 5% annual increase in contribution and an average rate of return of 7%, according to Blooom.*
Not too shabby considering the average retirement age in the U.S. is 63. Think of all you could do with those extra four years.
You might be thinking, “That sounds great but I don’t have $25,000 to feather my nest.”
If we crunch the numbers a little differently and you’re willing to work one extra year, it’s still possible to retire as a millionaire.
With just $15,000 in savings, you could retire at age 60 with $1 million dollars in your 401(k) by contributing $5,000 per year with a 5% annual increase in contribution and the same 7% average rate of return.
Ah, now we’re getting somewhere.
But what if a $15,000 nest egg is still out of reach?
If you’re just starting your career and have time to save up some money before you turn 30, you can still retire a millionaire.
If you bank $1,000 in savings by the time you’re 30 and contributes $5,000 annually with a 6% annual increase and an average 7% return rate, you could retire by age 60 instead of 65.
You still have the option to adjust your preferences as needed, so if you don’t feel so comfortable with being aggressive as you get older, you can change it.
That’s the great thing about Blooom. You can adjust your savings strategy if your needs or circumstances change, so you never lose sight of your retirement goal.
It’s difficult to become a millionaire unless you know how every penny is saved. Let Blooom monitor your retirement money so you can focus on how far your first million dollars will take you – and your dreams.
*Blooom and client fees are based on the average pre-blooom and post-blooom expense ratios as of 12/5/2017. The behavior and rebalancing value add estimates of 1.5% and 0.35% respectively, come from Vanguard's “Putting a value on your value: Quantifying Vanguard Advisor's Alpha” study. The client on their own return is calculated by taking the 7% annual return minus the behavior and rebalancing value adds, and the fee difference between the average pre-blooom expense ratio and average post-blooom expense ratio
Lisa McGreevy is a staff writer at The Penny Hoarder. If she had a million dollars, she’d take the Barenaked Ladies’ advice to buy some art. Maybe a Picasso or a Garfunkel.