If I Could Tell Every Retirement Saver 1 Thing Now, It Would Be This

Think for a second: How do you win a game of Monopoly?

Do you circle the board as fast as you can, refusing to buy anything, and only focus on stacking up cash?

Of course not. You buy properties. You invest early and get your hands on as many assets as possible. It's a race to build hotels and collect income. The players that buy nothing and hoard cash? They lose.

Well, the same idea applies to retirement and real life. Saving is crucial. But investing is what builds real wealth.

Why saving alone won't get you there

Let's say you save $500 per month, and put all of that money into a checking account at the bank. Do you know how long it will take to save up $1 million?

It will take 166 years. Not kidding.

Simply stashing money in a bank account makes it incredibly difficult to reach your retirement goals. But when you invest your money and activate compound interest, your wealth grows like a snowball.

Now let's look at what investing can do with $500 per month. Instead of saving in a checking account, let's say you invest all those dollars in a 401(k) or IRA. With an 8% average annual return (I'll explain why I chose this rate later), reaching that $1 million would only take 35 years.

That's a difference of 131 years!

You can even reach $1 million much sooner, by either saving more or getting a higher return on your investments. The reason I used an 8% annual growth rate is because it's a conservative estimate, slightly below the S&P 500 Index's long-term average of about 10%.

By the way, if you're confused about all this investing stuff, it never hurts to connect with an advisor. A short questionnaire from our partner, SmartAsset, helps match you with up to three fiduciary financial advisors, each legally bound to work in your best interest.

Automate everything

One of the best money moves I ever made was automating my retirement contributions.

Every paycheck, a little bit of money gets transferred into my investment accounts, without me ever having to think about it. And over the years, those small, consistent deposits have quietly grown into big balances.

If your workplace offers a 401(k) plan, start there. And if they offer a match, grab it! That's free money. Another easy option is opening an IRA and scheduling monthly transfers.

Experts recommend saving 10% to 15% of every paycheck. But honestly, I encourage people to save even more if they can.

Keep it simple with index funds

I'm a huge fan of index funds. These are low-cost funds that track big chunks of the market, like the S&P 500 Index.

That means when you invest in one fund, you instantly own shares of hundreds of companies -- without having to pick and choose.

Another easy setup is target-date retirement funds. They're like all-in-one portfolios that invest your money in a mix of stocks and bonds, and automatically adjust that mix as you get older.

And if you want a completely hands-off experience, it might make sense to work with an advisor. This no-cost quiz from our partner, SmartAsset, makes it easier to find a fiduciary financial advisor.

Go build your Monopoly board

Saving for retirement is a long-term game.

Just like collecting properties in Monopoly, the key is to keep stacking assets over time. Those investments will start paying dividends, growing in value, and snowballing into real wealth.

To make it easier, set your contributions on autopilot. This makes investing a habit, so all of your dollars are working hard while you continue living your life.