That’s right, follow the simple plan outlined by Kiplinger’s Personal Finance and you will be a millionaire by the age of 65 starting with $0 right now… guaranteed or your money back!
You’re 25 Now
Save $286 a month and you’ll be a millionaire by 65. Contribute to your 401k to get your company match, put 100% into stocks, pay down high interest debt like credit cards, and set up an emergency fund equal to six to twelve months of your expenses.
You’re 35 Now
Save $671 a month, or $304 if you already have $50k banked. Look to save 15% of your salary including your employer match in a 401(k), shift your assets to 90% stocks and 10% bonds, then start contributing to a 529 plan if you have kids (or plan to have kids).
You’re 45 Now
If you’re starting some scratch, you need to put away $1,698 a month. If you started with $50k then it’s only $1,298 a month. Happen to have $100k lying around? Then you only need $861 a month to reach a million. At this point you should be 20% bonds, 80% stocks and trying to maximize your 401(k) contributions. Remember retirement and don’t put your children’s college costs ahead of it.
You’re 55 Now
Ten years until your 65, so you’ll need to save $5,466 per month to reach a million. If you have $100k saved away, you’re down to $4,253 a month. Gotten up to $200k? Good job, that’ll be $3,040 a month. At this point you should be taking advantage of the $5,000 catch-up contribution bonus to your 401(k), shifting your allocation to 70% stocks and 30% bonds, and thinking about working a little longer if you’re short.
There you go! The path to millionaire status is clear, courtesy of Kiplingers.