$1.25 million. That's the average amount Americans think they'll need to retire comfortably, according to a survey released in the fourth quarter of 2022 by Northwestern Mutual. A year earlier, the magic number was a little over $1 million. 

However, the survey revealed that four in 10 Americans don't think they'll be financially prepared to retire when the time comes. You don't have to be in that group, though. Want to be a millionaire in retirement? Follow this Warren Buffett advice.

Two people lying on lounge chairs on a beach  while looking at the sunset.

Image source: Getty Images.

1. Start investing early

When Buffett was 68 years old, his net worth stood at close to $30 billion. Someone asked him how to make that much money. He replied:

Start early. I started building this little snowball at the top of a very long hill. The trick to have a very long hill is either starting very young or living to be very old.

Achieving the goal of becoming a millionaire in retirement is much easier than amassing a $30 billion fortune. But Buffett's advice is still applicable. The earlier you start investing, the easier it will be to grow your retirement account to $1 million or more. If you haven't already begun investing for retirement, start now.

One way to boost your returns is to put your money in a Roth IRA or Roth 401(k) plan. Sure, you'll have to pay federal taxes on your contributions. However, these retirement accounts allow your money to grow tax-free. Over time, your gains should be much greater than the total amount you contribute.

2. Pick businesses, not stocks

What you invest in is also important. If you want to follow in Buffett's footsteps, focus on investing in strong businesses. In his latest letter to Berkshire Hathaway (BRK.A -0.93%) (BRK.B -0.81%) shareholders, Buffett wrote: 

Our goal... is to make meaningful investments in businesses with both long-lasting favorable economic characteristics and trustworthy managers. Please note particularly that we own publicly traded stocks based on our expectations about their long-term business performance, not because we view them as vehicles for adroit purchases and sales. That point is crucial: Charlie and I are not stock-pickers; we are business-pickers.

What if you don't have the time to research businesses or don't feel confident enough to do so? No problem. In his 2013 letter to Berkshire shareholders, Buffett stated that a low-cost S&P 500 fund is a great alternative for investors who don't buy individual stocks.

3. Pay attention to valuation

There are many businesses that meet the criteria Buffett seeks that he hasn't added to Berkshire Hathaway's portfolio. Why is that the case? Buffett also focuses on valuation. If you want to buy individual stocks, pay attention to valuation as he does.

In that same 2013 letter to Berkshire shareholders, Buffett revealed he only buys a stock when they can determine that it's reasonably priced relative to the lower end of its estimated earnings range over the next five or more years. If the stock isn't attractively priced or he can't estimate future earnings, Buffett looks elsewhere. 

4. Let your winners work wonders over time

Buffett revealed his "secret sauce" to investing success in his latest shareholder letter. He wrote, "The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders."

The important lesson here is that you don't have to always make great decisions to be successful. Buffett frequently acknowledges that he has made plenty of mistakes through the years. However, just a few big winners have made him a lot of money. Berkshire Hathaway itself achieved a remarkable overall gain of 3,787,464% between 1964 (when Buffett took control) and 2022. 

Few people on the planet have been or will be as successful at investing as Buffett. The good news is that you don't have to be to still be a millionaire in retirement. The principles that have helped Buffett can help you, too.