Want to Build a Millionaire Retirement? Consider These 7 Moves in 2024.

Many surveys show that Americans think they need more than $1 million to retire, including the latest Northwestern Mutual 2024 Planning & Progress Study, which reveals that Americans now believe they need $1.46 million to retire comfortably. This might sound like a lofty goal, especially considering that American workers aged 65 and older had an average of only $232,710 saved in a 401(k) in 2022, according to a Vanguard analysis. But if you still want to take a shot at the million-dollar mark, which isn't impossible, we've outlined seven key moves you can make in 2024 to ensure you're on the right path.

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1. Calculate your net worth

You're probably watching your paycheck every month, but if you want to make real progress on your financial goals, you need to calculate your net worth . It's essentially the total of all your assets, such as cash savings, retirement accounts, and regular investment accounts, minus your liabilities, such as student loan debt or car loans. Checking your net worth frequently, ideally every month, will give you a better idea of your financial health and how you can improve it.

2. Develop a budget

Tally up all your income and jot down all your expenses to see if you are earning enough money to cover your monthly expenses. If the numbers don't look favorable, consider cutting back on spending, upskilling to increase your pay, or taking on a side gig. Your budget will give you the freedom and flexibility to allocate more toward retirement savings.

3. Create an emergency fund

It's unlikely that you'll be able to contribute as much as you like toward retirement if you don't have a financial cushion. Essentially, you need an emergency plan to keep you afloat when unexpected expenses arise, as they always do. Consider setting aside at least three to six months' worth of expenses in a high-yield savings account for emergencies. A good way to start saving is to have money automatically transferred from a checking to a savings account as soon as you get paid, so you won't miss the money.

4. Say bye to bad debt

It's somewhat subjective as to what qualifies as good or bad debt, but the key is to eliminate any debt that burdens you and keeps you in a financial chokehold. For example, in 2023, the average annual percentage rate for credit cards rose to 22.8%, the highest rate since the Federal Reserve started collecting this data in the 1990s. Depending on how much you owe, you could be giving away thousands of dollars just to cover the interest on your debt each year. Once you eliminate those debts, you can allocate more of that money toward your retirement savings.

5. Review your workplace benefits

You might be going to work mainly for a paycheck to pay the bills, but don't overlook the other benefits your job may offer. For example, your employer might provide a retirement plan such as a 401(k) or 403(b) with a company match . This can help you build your retirement savings and overall net worth. Also, if you qualify, you may gain access to a health savings account (HSA), which can be very useful during retirement.

6. Contribute to an individual retirement account

You can set up a retirement plan beyond what you have at work by contributing to a traditional or Roth IRA , depending on your income and when you prefer to pay taxes. In 2024, you can contribute up to $7,000 in total to these accounts if you are under 50, with an extra $1,000 catch-up contribution if you are older. If you consistently invest $7,000 annually in an IRA and earn a return of 10%, which aligns with historical averages , you could accumulate a million-dollars in your account within 30 years.

7. Open a regular brokerage account

You might not want to tuck all your money away in a retirement account because there may be penalties if you withdraw the money early. So, if you have some wiggle room in your budget, try to stash away at least $25 in a taxable brokerage account every time you get paid. There are no limits to how much you can contribute, and you can withdraw money at any age without paying penalties, allowing your portfolio's growth potential to be unlimited.

Although investment returns are not guaranteed, time can help you compound the returns you do receive. The earlier the start, the more time you'll have on your side. Commit to being disciplined and staying consistent, and you'll be further along on your journey than you were last year.

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