Some people retire with $100,000 to their names and get by just fine. Others retire with 10 times as much and struggle to manage their bills.
The amount of money you end up needing in retirement will depend on your personal lifestyle choices and what you want to do with your time. But if your goal is to live someplace expensive and travel extensively, then you may need a few million dollars in your nest egg to pull that off.
The good news? A few smart moves on your part could set you on a path to retiring as a multimillionaire. Here are a few important ones to make.
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1. Learn to live below your means
To accumulate wealth, you’ll need to save and invest money, which means you can’t spend your entire paycheck month after month, year after year. Rather, you’ll need to reserve some of your income for your 401(k), IRA, or another retirement account in which you’ll be saving.
Living below your means isn’t a difficult thing to do once you figure out what that means. A good bet is to choose one or two large expenses to cut back on rather than slash multiple small expenses that, individually, enhance your quality of life. For example, if you buy a home that’s well below what you can afford, you might free up a respectable amount of money each month to sock away, which means you may not have to worry about spending a little extra on restaurants or upgrading to nicer hotel rooms when you take your yearly vacation.