A record number of Americans have at least $1 million in their 401(k) accounts, according to data from Fidelity Investments. As of the third quarter of 2020, there are around 262,000 401(k) millionaires in the U.S.

It's easy to fall into the trap of thinking that you need to be wealthy to retire a millionaire. However, it is possible to retire with more than $1 million, even if you're not rich. Here's how.

Man throwing hundred dollar bills into the air

Image source: Getty Images.

1. Figure out how much you need to save

If you're aiming to save $1 million or more by retirement age, you'll need a game plan. First, figure out what age you want to retire and how much you want to have saved by then. Next, plug your information into a retirement calculator to see how much you'll need to save each month to reach that goal.

It may take some trial and error to determine your savings goal. But if you're determined to retire a multi-millionaire, you'll need to have a monthly savings target in place to make sure you're on track.

2. Start saving early

Retiring a multi-millionaire is even harder than just accumulating $1 million. But it's more achievable if you start saving as early in life as possible.

Say, for example, you want to retire at age 67 with $2 million. If you started saving at age 25, you'd need to save just over $300 per month, assuming you're earning a 10% annual rate of return. But if you wait until age 40 to begin saving, you'd need to save a whopping $1,400 per month to reach your goal, all other factors remaining the same.

This isn't to say that it's impossible to retire a millionaire if you're off to a late start. But starting sooner rather than later will make it much easier to reach your target.

3. Set up automatic contributions

Automatic retirement fund contributions can help you save consistently, which is key to retiring a millionaire. Once you know approximately how much you need to save each month, set up your 401(k) or IRA so that you're saving a set amount each week or month.

Not only does this help keep your savings on track, but it also makes it easier to prioritize saving in your budget. When you treat saving for retirement like it's another bill you have to pay each month, you're more likely to stick to your saving plan.

4. Take advantage of matching 401(k) contributions

Employer matching 401(k) contributions can help supercharge your savings, so it's smart to take full advantage of them.

How much you'll receive in matching contributions depends on your employer and your salary. The average employer match is around 3.5% of a worker's wages, according to data from the Bureau of Labor Statistics. So if you were earning, say, $60,000 per year, you could receive $2,100 per year in free money from your employer.

While a couple thousand dollars per year may not sound like much, it adds up over time. Especially when you consider how compound interest affects your savings, you can accumulate tens or even hundreds of thousands of dollars from employer matching contributions alone.

5. Be willing to make sacrifices

Even if you do everything right, it's still tough to save $1 million or more. So in many cases, you'll need to be willing to make some financial sacrifices.

This could mean cutting costs now so you have more money to save. Or you may consider delaying retirement by a few years to give yourself more time to prepare. You could also decide that retiring a millionaire isn't the right move for you, and you'd rather live on less in retirement than make sacrifices now. There are no wrong answers here, and your decision will depend on your personal preferences.

Retiring a millionaire takes dedication and a solid strategy, but it can be done. By making these moves and getting started saving today, you can enjoy a more financially secure retirement.