Millennial Millionaire Project
The Millennial Millionaire Project
I believe millennials should have a goal of at least having a million dollars saved by retirement. Considering inflation, this should be the bare minimum, especially for those that plan on being retired for 30-35 years. Every situation is different, but for today we are focusing on how to save and grow assets to cover us when we need them the most.
Using myself (a thirty five year old millennial) as an example, I know that if I want to have at least $1,000,000 by my retirement age of 65, I have to save about $820 a month. This assumes that I have nothing in savings already and can average 7% annually on my investments over the next 30 years.
Does $820 a month sound scary to you? If so, it is ok. If you cannot save that amount every month, I get it, trust me. With three kids, a stay at home wife and still paying off student loans and a mortgage, saving isn’t easy. The great thing is that $820 is an average, so if you can’t do it today, you can add more later when you get the bonus and the kids move out of the house. Of course, the earlier you save, the more attainable the goal becomes, but that is why it is so important to have regular checkups with an advisor to keep you on track.
How to generate at least 7% annually?
Nothing is guaranteed in investing, but history tells us that stocks are more likely to generate greater returns over the long run versus bonds. Picking winners isn’t easy, but our generation could shape the future economy, as the companies we use may be the most profitable. Equally important to where we buy our products, is how we purchase them. Will we continue to buy online? Which apps will we purchase products through? And what form of currency will we make these purchases with? It can pay to think outside the box. (Please keep in mind with stocks that may generate potentially bigger returns, they also come with more risk of potential loss).
Which type of an account to invest into?
In a perfect world, our $1,000,000 at retirement would be completely tax free! Is it possible? Potentially. A Roth IRA offers tax free growth and distributions (if qualified). Both the Roth and Traditional IRAs contribution limits for 2019 are $6,000 of your taxable income for the year ($7,000 if over age of 50). There are some other strategies for tax free investing, but we will table that for a later date.
Am I a suitable advisor for you?
Maybe. If you want to partner with someone that is distinctly qualified to understand this generation and has the opportunity to partner with over the next 30 year, then yes. If interested, please feel free to contact me the old fashioned way or on social media. Thanks.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Investing involves risk including loss of principal. No strategy can ensure success or protect against loss. The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Hypothetical examples presented are not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing. It is important to keep in mind that stocks can add the potential for higher returns, they also come with more risk and the potential for more loss.