Invest Your Way to a $1 Million Nest Egg

Invest Your Way to a $1 Million Nest Egg
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It's a literal million-dollar question: If you had $1 million in 1975, how much would it be worth today, assuming you stashed the money in your mattress? Would you guess $4.4 million? That quadruple jump comes courtesy of the U.S. Bureau of Labor Statistics, and it's certainly more than if you invested in, say, a foundering mattress company.

But the buying power of that $1 million would stay flat over 40 years. Meanwhile, a cool million just isn't what it used to be. If you reach that magic number in 2015, it's only worth $227,000 in 1975 dollars, BLS statistics show. And the value of $1 million today will surely decline in the years ahead, especially if inflation skyrockets or health care costs outpace the cost of living.

"Besides inflation, retirees are living longer, more active lives, which is causing more nest eggs to be depleted faster than expected," says Anthony Criscuolo, client service manager and portfolio manager with Palisades Hudson Financial Group in Fort Lauderdale, Florida. "Too many people make their financial planning and retirement savings goals based on random guesses, such as, '$1 million sounds good.'"

That said, $1 million remains a magic number for many nest egg builders. The word "millionaire" has a delightful zing to it. And assuming a 5 percent annual return on investment, you can reap $50,000 a year in retirement income just by sitting back, which beats the mattress strategy any day. Then again, you'll want to consider the tax ramifications first.

The next million-dollar question is: How do you get there? Consider the 10 sound principles in the slideshow above as you invest your way to the seven-figure mark.

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