‘You’ll end up with $1.5 million in the bank’: Shark Tank's Kevin O’Leary insists these simple money moves are key for your retirement — is your nest egg on track?
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At 70, Kevin O’Leary is perhaps past the traditional retirement age, and he’s showing no signs of swapping his suit for sweatpants. But when the “Shark Tank” star and entrepreneur does choose to hang it up, he’ll have a tidy nest egg waiting for him, which he set up long before hitting his senior years.
But many Americans aren’t like O’Leary and are looking to throw in the towel early. According to a recent survey by MassMutual, the average retirement age in the U.S. is 62. However, around 35% of pre-retirees admit they’re too far behind in their savings to make that goal a reality.
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And he has some advice for his fellow Americans if they want the same peace of mind: put at least 15% of your salary into a 401(k) account— and he isn’t accepting any excuses.
“Stop buying all that crap you don't need. You have to adjust your lifestyle to make sure you put 15% away,” Mr. Wonderful insisted on an episode of Good Morning America's Swimming with Sharks.
“You’ll end up with $1.5 million in the bank after a career.”
Research shows Americans require over $1M for retirement
Northwestern Mutual's 2024 Progress and Planning Study found adults expect they need $1.46 million in savings to retire comfortably — an increase of 15% from last year. While many experts, including O’Leary, advocate for setting retirement funds aside as early as possible, most Americans are juggling other financial responsibilities, like mortgages or student loans.
Managing all this on your own can be overwhelming — but it doesn’t have to be. Professional advisors — like those at Vanguard — can help you create a money management plan. Advisors can guide you on how to grow your nest egg and even help determine your living expenses during retirement.
Vanguard’s hybrid advisory system combines advice from professional advisers and automated portfolio management to make sure your investments are working to achieve your financial goals.
With a minimum portfolio size of $50,000, this service is best for clients who already have a nest egg built up but are ready to grow their wealth with a variety of different investments.
All you have to do is set up a consultation with a Vanguard advisor, and they will help you set a tailored plan and stick to it.
Contributing 15% to your 401(k) each year
As of 2023, 73% of private industry workers had access to retirement plans through their employer, according to Bureau of Labor Statistics data. However, a quarter of that group chose not to take advantage of them.
And a recent CNBC Your Money Survey found that some workers aren’t necessarily making the most out of their employer-sponsored plans, with 8% saving only the automatic default amount, and 24% putting away as much as their employer will match.
Of course, not all companies offer 401(k) plans — but there are other options for saving for retirement, like a traditional IRA or Roth IRA. You could also opt for a gold IRA, with help from Goldco, which combines the tax advantages of an IRA with the inflation-resistant properties of gold.
Goldco is a precious metals dealer offering IRAs and direct purchases of precious metals and coins. Gold has historically acted as a hedge against inflation, and many find it to be a more secure place to invest your retirement fund.
O’Leary says Americans should be investing 15% of their annual salary — assuming an average salary of around $60,000 a year — into a 401(k) at minimum to successfully retire.
He points to the abundance of investment apps, which make investing in the stock market far more accessible to the average person than it used to be.
An automated investing platform like Acorns can help you invest your money in a way that best aligns with your financial goals. Acorns, an app designed to simplify saving and investing, automatically rounds up each purchase you make to the nearest dollar, investing the spare change into a diversified portfolio of ETFs.
It’s a seamless way to grow your savings without any extra effort, allowing you to work towards your goals – even if you’re only investing a few cents at a time.
Acorns also offers a subscription tier with extra benefits, including a 3% IRA match on contributions held for four years and a 3% APY on checking accounts. Plus, your monthly fee is waived when you sign up for direct deposit.
If you sign up with Acorns today, you can receive a $20 bonus to kickstart your investing journey.
Read more: These 5 magic money moves will boost you up America's net worth ladder in 2024 — and you can complete each step within minutes. Here's how
'Put 15% away'
The interest rate on deposits held at major banks is nearly 0%. Wells Fargo, Chase and Bank of America offer entry-level rates of 0.01% on these deposits.
Given that the Federal Reserve’s benchmark interest rates are between 5.25% and 5.50%, bank deposit rates certainly appear like a bad deal.
If you find that your own checking account is lower than the benchmark interest, consider switching to a high-yield cash account with Wealthfront.
Wealthfront is a financial services platform, offering everything from automated investing to high-yield cash accounts. With Wealthfront, you can earn a competitive 5.00% APY – 10x the national average rate with no account fees or balance minimums.
So, you can get started with as little as $1 and begin growing your savings effortlessly.
A survey of 8.3 million Chase customers by JP Morgan found that the median cash balance in a checking account was around $6,600 depending on income bracket, as of February 2024.
That’s a lot of money in aggregate that isn’t earning much interest.
To be fair, these checking accounts are not designed for capital appreciation. Account holders generally use this cash for daily transactions and short-term needs, such as rent and utilities.
If you want to put your money somewhere where you know it will grow more efficiently over time, consider a certificate of deposit (CD). CDs allow your money to grow at a better rate over a set period of time. However if you withdraw the money before the end of the term, you’ll pay a penalty fee.
If you want to scope out available CD options currently available on the market, CD Valet makes it easy.
With CD Valet – an online CD marketplace – users can shop and compare top certificate of deposit rates from various banks and credit unions nationwide.
Their extensive database shows the most competitive rates without bias, with daily rate updates and earnings calculators which gives you an array of free tools to help you find the right CD to meet your savings goals.
To help get the most out of the disciplined approach, you should also consider opening a high-yield savings account to give them a better chance to grow to their full potential before retirement. Our list of the Best High Yield Savings Accounts of 2024 is a good place to start.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
