Many Americans dream of becoming a millionaire, and most believe they’ll need more than that to retire comfortably. While it may seem daunting, you don’t need to be a top executive, famous athlete or popular musician to make big bucks. The secret is much simpler — and perhaps more boring — than that, and failing to take advantage of this one money rule could impact your retirement greatly.
The median retirement age in the U.S. is now 62, and only 36% of Americans retired when they planned to, according to a 2024 study by the Transamerica Center for Retirement Studies (TCRS) and the Transamerica Institute. About 12% of employees retired at the traditional age of 65, while most retirees (59%) retired before 65 and 30% are still working after 65.
The same study also suggests most Americans aren’t saving enough for retirement. Only 21% of those who retired did so because they had the financial means to retire comfortably, and 68% of those who retired later than planned did so for financial reasons. But working longer may not be possible for everyone. Highlighting this fact, 46% of those who retired earlier than planned did so for health reasons.
But perhaps even more concerning, almost 50% of Americans are not saving for retirement at all, according to Rachel Cruz, personal finance expert and co-host of The Ramsey Show. In a recent Fox Business interview, Cruz said that, based on her experience, many are struggling to even find the margin to save for retirement. That’s why she says the first step is to find the margin in your budget.
According to Fox Business host Maria Bartiromo, “The No. 1 thing to do on your road to becoming a millionaire is very simple: join your company’s 401(k) plan. Put as much money in there as you can, early on, and make sure you do not touch it.”
Cruz recommends contributing to your 401(k) up to the match your company offers, if it offers one. Matching can add significant contributions to your retirement savings over time. For instance, in 2023, the median match for plans managed by Vanguard — which manages retirement accounts for 4.9 million people through 1,500 plans — was 4.0% of annual income. The average was 4.6%, while most plans had matches between 3% and 6%.
