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Make a million bucks

By Barbara Whelehan ·
Saturday, February 16, 2013
Posted: 6 am ET

The other day, one of my 40-something colleagues asked me what he can do to better prepare for retirement. He said he contributes 5 percent of his pay to his 401(k). "Contribute 10 percent," I suggested. He replied that his budget is tight, and pointed out that with the company match, he's really investing 8 percent of his pay. "Contribute at least 2 percent more," I recommended.

Plenty of Americans in all age groups are in the same retirement planning predicament. They're not sure how to adequately prepare. All they know is that they need to save a truckload of money to get them through 20- or 30-plus years of retirement. A million bucks seems like a worthy goal.

There's hope for everyone who sets this intention, regardless of how old they are. In fact, the late Bill Fisher didn't seriously start amassing wealth until he was 72, as revealed in the self-published book, "The Boomer's Guide to Recovering Your Lost Retirement: The Bill Fisher Story," by Michael R. Burns. Burns wrote about his father-in-law's methods of accumulating wealth.  

Long story short, at 72 Fisher invested $50,000 in life insurance proceeds, as well as his pension and Social Security checks, and continued to work until age 84, when he finally retired. As an octogenarian, he was worth a million dollars.

5 steps to success

I asked Burns for the best advice to boomers who may have lost money in the recent financial crisis. In his words:

  • First, they have to balance their budget. They have to get more income coming in than they are spending each month.
  • Second, they must continue to work. We are all living longer. … If you are healthy, you should be able to work at least until 70. You can work from your home being a rep for a company or sell stuff on EBay.
  • You should wait to take out your Social Security until 70. In most cases, you can double your money.
  • You should contribute to an IRA and 401(k). In these tax-deferred retirement accounts, you can build wealth quickly.
  • With your leftover money, you should invest in high-dividend stocks, dividend reinvestment programs, or DRIPs, municipal bonds and residential real estate.

"Baby boomers should create multiple sources of income," Burns says.  "They can live off their salary and invest everything else. Bill Fisher did this and he lived a very active life, traveling overseas, going to the country club and still built a net worth of $1 million when he was in his 80s."

Get a head start

While Fisher's accomplishments are inspiring, it's better to start saving at a younger age and make it a goal to amass a million bucks or more long before you turn 70.

Of course, unlike Fisher, whose house was paid off and whose children no longer depended on him, younger folks face more financial obstacles. They need to negotiate the purchase of a home and car, pay off student loan debt, save for their own children's college education, put money in an emergency fund and invest for retirement -- all while juggling monthly bills for current living expenses.

But the younger you are when you start saving for retirement, the better your chances of amassing a million bucks or more because of the power of compounding. Start by deferring 10 percent of your pay to your company retirement plan. You won't miss it if it goes directly into investments instead of your checking account.

And if your company doesn't offer a retirement plan, open an individual retirement account and set up automatic transfers from your savings or checking account. That's the easiest way to accumulate wealth -- maybe a million bucks or more.

The bottom line: While it's never too late to start saving for retirement, it's always better to start early.


Follow me on Twitter: BWhelehan.

Barbara Whelehan is a co-author of "Future Millionaires' Guidebook," an e-book written by Bankrate editors and reporters. It is available at Amazon, Barnes & Noble, iBookstore and other e-book retailers.

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February 18, 2013 at 9:31 pm

Seriously? Work until you are 70? What a great idea if you can find a job! I lost my job through'reduction in force' and at 64 can no longer find a job at my former salary. In fact I can not, after over a year, even land an offer of anything more than seasonal work at minimum wage. I am a professinoal with extensive job experience in many areas which obviously means nothing. So don't believe that age discrimination isn't alive in today's job market.

February 18, 2013 at 9:24 pm

Tell me how to get a job paying >$60,000/yr at age 69.

February 18, 2013 at 9:22 pm

Sorry to upset your tomato cart, but it takes a lot to retire and now, with a president who takes and spends, the economy is failing and the mortgage rates are very low, but so are the investment rates. You can't make on your pension a decent amount to stay even, with all prices rising and no jobs available.
Enough with transparency, enough with community organizers, - get a real government who wants to help their people.
As said by the Pediatric Neurosurgeon, the government and president work for us. If they were CEO's and producing as they do, they would have been fired.
Sitting back a waiting for handouts won't cut it.

February 18, 2013 at 9:20 pm

Somehow most of you seem to think people have money. Well those living on Social Security only do not. What is a surprise is that AARP touts various programs for Seniors that cost money and even their wise comments about senior living seem to center on those with money. When are you people going to start looking at individuals who don't have money and get one small check a month. I belong to AARP but am cancelling because they have done nothing to help those of us below the proverty level and who do not qualify for programs because our Social Security is a few dollars above their "qualifying" level.

February 18, 2013 at 9:05 pm

Mr. Fisher is an example of our society of greed. This world's problem is, and always has been greed. At what point can we finally take some time to give back to our community and society with our time and show some love and HOPE through our creator. Retirement is a good time to share this. Remember to learn from yesterday, live for today, and hope for tomorrow. That should have nothing to do with how to make more money.

February 18, 2013 at 8:56 pm

Okay all of your financial information is great for people with money but if one is 67 years old, living on Social Security, and unable to work due to severe back and nerve damage (unable to sit for long periods of time, walk, or bend due to increasing pain. Movement (even sleeping is hard). How do we make any or save any money. How do we survive. Using our Social Security to pay rent, utility bills and occasionally food and doctors or hospitals takes all of our money.

February 18, 2013 at 8:49 pm


Some of you people seem to be living in the land of Oz! Most people in the US don't make enough money on there jobs to even cover monthly expenses much less saving for retirement.

Welcome to the wonderful world of the WTO, NAFTA, CAFTA and all the other AFTA's.

scott smith
February 18, 2013 at 8:44 pm

i am just about to retire and enjoy my life . i am going to collect social security as soon as i can . they all want you to wait till 66 or 70 you better hope you live that long another thing if you don't have your bills around and a good savings by 62 you are never going to retire .

free at last
February 17, 2013 at 10:26 am

Depending upon your expense rate, a million could cover your entire retirement-- or last only a few years. One of the hidden benefits of saving is that it automatically reduces the expense rate to which you become accustomed. So even if your investments don't show stellar long term performance, the fact that you became used to living on less is a major boon to your retirement readiness. Don't just aim for dollars of net worth, instead think of how many years the pile could last.

February 16, 2013 at 5:45 pm

Good advice. Here's a few more thoughts. When my wife and I both worked, her salary went into savings. All of it. She worked for awhile after we had kids, but after our third, most of her salary was going to child care, so she quit work to stay home. We adjusted, and after a couple of years every time I got a raise, it went into my 401k. If my raise was $50 a month, that's how much I increased my 401k withholdings. You'll find that in retirement, your costs don't go down that much. You'll also find that $1M isn't that much to live on when there's no steady income, and you like to travel. Shoot for $2M.