Recent data from Northwestern Mutual finds that Americans think it'll take $1.46 million, on average, to retire comfortably. That might seem like a daunting sum, but getting there may be easier than expected. In fact, one simple move on your part could potentially lead to a nest egg that large -- or even larger.
When your savings get automated
When you're reliant on yourself to transfer money into a retirement plan month after month, you have the potential to stray. So a better bet may be to sign up for your employer's 401(k).
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The benefit here is that your contributions will be taken as automatic payroll deductions so you're not writing your savings a check every month. Rather, you're having that money come out of your pay as a matter of course, effectively forcing yourself to fund your 401(k) consistently.
Furthermore, when you save in a 401(k) plan, there's often an employer match to enjoy. That's money you can invest on top of your own contributions to grow a nice amount of wealth.
You may be pleasantly surprised by your results
Regularly funding a 401(k) for many years could lead to more retirement wealth than you may have imagined. Let's say you contribute $250 a month out of your own earnings, which also snags you a $250 employer match for a total monthly funding amount of $500. Do that over 40 years, and you could end up with $1.55 million in savings if your 401(k) delivers an average annual 8% return, which is a bit below the stock market's average.
That $1.55 million is a notch higher than the average amount of retirement savings Americans think they need. And it could certainly make for a very comfortable retirement for you.
