9 Steps to Retire a Millionaire on an Average Salary

It's easy to assume that people who retire with millions of dollars to their name are able to do so because they earn a bundle. In reality, you can retire a millionaire even if you only bring home an average salary. Here's how.

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If you carve out enough money from your earnings to consistently fund an IRA or 401(k) plan, you can eventually grow enough wealth to be a millionaire. And the best way to stay on track is to stick to a budget. That way, you'll know what your various bills cost and you'll be able to make changes as needed when your expenses start to rise, all the while ensuring your retirement plan contributions don't fall by the wayside.

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Getting in the habit of not spending your entire paycheck will make it easier to stay on track with your IRA or 401(k) contributions. If you can train your brain to be happier with a less fancy car, house, or annual vacation, eking out funds for your savings won't be as difficult.

The more debt you have, the more money you spend on interest. That's money you won't have available to put into your retirement savings. While it's OK to finance a home or vehicle with a mortgage or auto loan, aim to steer clear of unhealthy debt, like a credit card balance.

The more time you give your savings to grow, the more wealth you'll wind up with. Try to start funding a retirement plan as soon as you're earning your first regular paycheck, and keep at it from there.

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If you have access to a 401(k) plan at work, you may also be entitled to matching dollars from your employer. Make sure to contribute enough to take advantage of that free cash, as it could help you inch toward your ultimate savings goal.

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Keeping your long-term savings in bonds may not get you to millionaire status. But if you're willing to invest your retirement plan in stocks, you may earn a high enough return that leaves you with a massive pile of money. In fact, if you put $500 a month into your retirement plan and invest it over 40 years at an average annual 7% return, which is a few percentage points below the stock market's average, you'll end up with a cool $1.2 million.

Ideally, you'll get a pay bump every year at your job. If you make a point to stash that extra money in your retirement savings, it'll lead to a higher ending balance.

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Funding your retirement savings off the bat each month is a good way to stay on track. The good news is that 401(k) plans are funded automatically once you sign up for one. If you have an IRA, find one with an automatic savings feature so you're not tempted to spend your contribution dollars elsewhere.

People are living longer these days, which means you may have the flexibility to extend your career and boost your savings at the tail end of it, when you're likely to be earning more. If you're close to retiring a millionaire in your late 60s but not quite there, working until the age of 70 could get you to that goal.

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You don't need to earn a ton of money to retire with enough savings to live well. You just need to commit to that goal early on and make smart moves and sacrifices that help you achieve it.

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