For Mark Roberts’ Use: For most of us, hearing the words “the American Dream” conjures up images of home ownership, white picket fences, two and a half kids, and a fuzzy Golden Retriever. Additionally, you might also associate those words with a comfortable retirement.

It used to be that people dreamed of saving (and growing) a million dollars in their retirement accounts. But many of us now feel that goal is out of reach. Others assume they’ll get there someday, because they earn high incomes, but then they never reach the goal because they failed to plan appropriately. The truth is that saving a cool million is difficult to do, but definitely a possibility if you plan early, and continue planning throughout your career.

So how do you do it? An retirement fund analysis* of of those who managed to save a million dollars revealed the following information:

  • Millionaires began saving early in their careers
  • They contributed an average of 14 percent of their salaries to their accounts each year
  • They took full advantage of matching funds from their employers, and took part in profit-sharing opportunities when offered
  • They never cashed out their accounts, for any reason, or borrowed from the funds
  • They invested more of their assets in equities (higher risk can also mean higher earnings over time, but of course you don’t want to take on more risk than you can afford)

The most interesting part of the analysis* was the income breakdown of those who did manage to save a million dollars in their accounts. A substantial amount of these people – 18 percent, in fact – were middle-income earners whose salaries fell below $150,000 per year. Even the middle class have a shot at a very comfortable retirement.

Of course, you should always seek professional advice from a financial advisor before making big decisions or taking risks with your money. Keep in mind that the strategy that works well for one person might not be the strategy that is right for you. Give us a call, and we can discuss your goals and help you make a plan to achieve them.

*MarketWatch, November 12, 2013