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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 19, 2013 at 12:37 pm

Man - lots of bitter folks. If you've got a better idea than work longer and save more, let's hear it.

Rich Prescott
February 19, 2013 at 11:38 am

Please do not tell people to work until they are 70. Today employers layoff the older workers while the employee is in their 40's and 50's. Yes, there are laws about age discrimination but I have never heard of anyone winning an age discrimination law suit. The best plan is to say "save and invest like your employer will lay you off tomorrow".

February 19, 2013 at 10:48 am

Sounds like the old fashioned tried and proven methods my mother taught me. She learned from the days of the Great Depression dont spend more then you make. Be a saver not a spender. Keep your life simple. When she died at 82 she was debt free. If she didnt die from cancer she probably would have lived longer. She was living pretty good for her age on her retirement.

February 19, 2013 at 10:14 am

It is ridiculous to keep giving the advice "keep working". Many folks would love to work. But employers frankly don't want older workers and are laying them off in droves, so many will not have that option. Folks are not choosing to stop working as much are they are being forced to stop working with little hope of finding a job. Perhaps a better article would be "how to find a job over the age of 55 that does not involve being a Walmart greeter or serving fries"!

February 19, 2013 at 9:20 am

1. If you enjoy your job, keep working until somewhere around 65 or 66. Then retire and enjoy the fruits of your labor; it's not all about money.

2. Make every attempt to be debt free when you retire.


4. Think about what you want to do with the rest of your life and make plans to make it happen.

5. Use your retirement years to do the things you never had time for when you were working.

6. You only have "one life," enjoy it!

February 19, 2013 at 9:17 am

I'm 68 and retired at 59...thought I'd be fine with CD' off the interest.....that was a joke...nothing's sure these days and with the way the country is headed....where do you turn? The minute that SS goes up another $10 for you, the Medigap insurance goes up $20 for you.........just enjoy your life as much as you can! There's no getting "ahead" anymore!

February 19, 2013 at 9:09 am

You're confused. He didn't buy life insurance with $50K, he invested the proceeds (cash value of $50K) of a whole life policy he already had.

February 19, 2013 at 8:50 am

Im so tired of these finanical "experts" telling everyone how to invest. They are only looking out for themselves. I bet this Bil Fisher is a fictional person. I mean buying life insurance at his age? You know what that is going to cost? I'm 59 and very healthy. I had a life insurance policy quote, and I almost had a heart attack. It was hitting over $200 a month. And that was onlyh for $20,000. Please let's get real!

February 19, 2013 at 7:59 am

It's nice to have something put away for retirement, but in these times what is safe to invest in....older people don't spend as much.....if you're healthy wait til 65 and then retire.
Some people may enjoy working til their in the 80s, I'd rather enjoy the latter part of my life. Life is short!!

February 19, 2013 at 6:42 am

Yeah, work until your 84 and die at 85! But you will have $1,000,000 in the bank. Your kids will know how to enjoy it.