If you're holding your breath waiting for the 2020 election results, you'll turn blue regardless of your political affiliation. As well, holding off on your retirement plan based on who is or isn't in the White House will likely suffocate your savings growth. The truth is, the path to retiring a millionaire doesn't change based on which party or personality sits in the Oval Office.

The market grows regardless

Retirement savings plans are anchored by three variables: how much you contribute to your savings each month, how long you make those contributions, and the annualized rate of return on those funds. The first two -- what you contribute and for how long -- aren't hard to define. You should know what you can afford to save, and you should have an idea of when you want to retire.

Highway sign that reads, Millionaire next exit.

Image source: Getty Images.

But what about that third variable: your returns? Advisors generally recommend you plan for returns between 6% and 8%. The rationale is that the midpoint of that range approximates the long-term, inflation-adjusted, annualized growth of the stock market. Specifically, the annualized return of the S&P 500 between 1926 and 2019, counting dividends and adjusting for inflation, is just a shade over 7%. Not only that, but you'll see similar results for other time periods that are at least 30 years in duration. Between 1990 and 2019, for example, the S&P 500's annualized return was 7.39%. Between 1980 and 2010, it was 7.69%. And between 1970 and 2000, the market grew 7.52%.

The point is, historic annualized market growth rates are consistently around 7% for longer time periods -- regardless of which party spent more time in the White House. A single presidential term, or even two terms, isn't going to change that pattern.

The path to becoming a millionaire retiree

If your retirement account is primarily invested in stocks, you can reasonably rely on that 6% to 8% growth range for planning purposes. You know the stock market averages 7% growth, but your portfolio might not consist entirely of equities. As you get older, you should be reducing your exposure to equities while increasing your fixed-income positions. This change adds the stability you need as you approach retirement, but the trade-off is lower growth.

For a portfolio that's, say, 40% fixed income and 60% stock, a 6% growth rate is more realistic. The 8% rate might be right if you're young and invested aggressively in growth stocks.

There's a caveat here. These growth rates only make sense if you intend to stay in the market consistently. Once you start moving in and out based on who's president or how you feel on a given day, all bets are off. That behavior generally lowers your returns over time for two reasons: One, the less time your money is invested, the more slowly it will grow. Two, the more you trade, the more likely you are to make expensive timing mistakes. You might inadvertently sell the day before the market rallies, for example, or buy the day before the market crashes.

With that disclaimer out of the way, let's get down to the details of your millionaire retirement plan. First, calculate how many years you have between now and your expected retirement date. From there, a compound earnings calculator can help you back into the monthly contribution needed to reach that $1 million balance at different growth rates.

You can see the monthly contributions required for different savings timelines at 7% growth in the table below.

Years Until Retirement

Monthly Contribution

Estimated Balance at Retirement






















Table data source: Author calculations.

These numbers assume you are saving to a tax-deferred account like a 401(k). The monthly contributions for the 10- and 15-year plans are higher than 2021 contribution caps for 401(k)s and IRAs, however. In those situations, you'd need to max out your contributions to your tax-advantaged accounts and then save the excess in a taxable account that holds tax-efficient positions, such as growth equities that don't pay dividends. Any taxes you incur will slow your savings growth.

Stay on course

These are unsettling times, but a divisive political climate doesn't have to get in the way of your efforts to save for retirement. Take a deep breath, keep on contributing, and remember that the political affiliation of this president or the next one isn't a factor you need to consider in your long-term savings plan.