Retire a Millionaire

Retire a Millionaire
by Scott Wallace

One million dollars. Once again that magical number that says you've made it in life.

But did you know that you don't have to work your whole life to achieve such a monumental financial achievement? Yes, you heard correctly: you DON'T have to work your whole saving here and there to retire as a millionaire. Believe it or not you can have all your savings completed before you are twenty one and still retire a millionaire.

Here's how this easy yet brilliant plan to retire a millionaire works.

You are young, vibrant and full of energy. You are barely sixteen years old and your parents have allowed you to work part time for spending money and everyday expenses.

Now let's say that every year that you work you take home about $7500. Out of the money that you earned you invest $2000 of it into a Roth IRA. By investing in a Roth IRA your money will continue to grow tax free as long as you have the account open. Once you reach the ripe old age of 59 1/2 you can withdraw your money tax free and enjoy your retirement.

Now here comes the true secret to retiring a millionaire. Money when invested is compounded annually and is usually figured as an average percent over the last twelve months. Lets say that the Roth IRA you have invested in returns you an average of 10.7% per year. After working just four years part time and investing a total of $8000 of your hard earned money your total investment will be worth about $9400. If from here on out you put NO additional funds into the Roth IRA and simply let compound interest do the work for you, the account will grow to:

· $25,917 by the time you are 30
· $71,625 by the time you are 40
· $197,943 by the time you are 50
· $547,037 by the time you are 60
· And $1,114,423 by the time you are 67

And yes you will have started and finished your retirement savings all before your 21st birthday.

A brilliant plan? Some say yes and others say no, but a plan irregardless that will make you a millionaire by retirement. This simple plan relies only on starting early and tenacity. Depending on how the Roth IRA is invested you cold earn even more money. With an average return of 12.5% your compunded earnings will have made you $2.4 million dollars at retirement. On the same note however you could experience a lower average return but still have a substantial nest egg built for your golden years.

Can it be done? Absolutely. There is simply no reason that every person in America cannot retire with a million dollars. Some will scoff at the idea but as I stated previously becoming a millionaire says that you have been successful in life. Ironically even with such an easy plan more people will retire poor than millionaires.