It’s the advice you hear passed around like a family recipe: Work hard, save consistently, and one day you’ll retire comfortably. But what if this so-called tried-and-true advice is far from a recipe for success and more like a blueprint for disappointment?
Ramit Sethi, bestselling author of I Will Teach You to be Rich and Money For Couples, didn’t hold back as he reflected on what he considers the worst financial advice he’s ever received.
“Get a job at an industrial company and work there for 40 years so that I can retire with $1M in the bank,” he told . “I was like $1 million? That’s it?! No, thank you!”
The old axiom about saving $1 million for retirement hasn’t changed much.
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they’ll need $1.46 million to retire comfortably, according to a Mutual Life study. But Sethi rejects any such advice.
Why Sethi rejects the $1M retirement goal
He says the issue isn’t just oversimplified math but the mindset it fosters: grinding away for decades only to scrape by on a fixed budget in retirement.
, standing at 61, up from 57 in the 1990s, according to a 2022 Gallup poll.
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of $313,000, far from what’s needed for a secure and fulfilling retirement.
This disconnect is why Sethi encourages people to rethink their financial approach, shifting the focus from reaching milestones to developing a strategy that builds wealth over time.
Building your retirement savings
compound interest
“The power of compounding is something that is truly hard to understand until you see it over and over again,” Sethi explains.
.
Even though the late investor only contributed $36,000 less in total, they lost out on the exponential growth that comes with compounding over decades.
, taking full advantage of employer matching programs and diversifying your investments can boost your retirement savings. Taking full advantage of employer matching programs is practically “free money” that can supercharge your savings.
, which can free up more cash to invest.
With consistent effort, thoughtful planning, and focus on long-term growth, building the retirement of your dreams is well within reach.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
