‘You’ll end up with $1.5 million in the bank’: Kevin O’Leary says you should do this 1 thing with your 401(k) in order to 'succeed into retirement’

Moneywise
‘You’ll end up with $1.5 million in the bank’: Kevin O’Leary says you should do this 1 thing with your 401(k) in order to 'succeed into retirement’
‘You’ll end up with $1.5 million in the bank’: Kevin O’Leary says you should do this 1 thing with your 401(k) in order to 'succeed into retirement’

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At 69, 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.

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.”

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Research shows Americans require over $1M for retirement

A recent study from Northwestern Mutual found adults 18 and older expect they need $1.27 million in savings to retire comfortably — an increase from $1.25 million 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 Advisor.com* —  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.

Advisor.com connects you with professionally vetted fiduciaries, financial advisors, and financial planners. All you have to do is answer a few questions and their algorithm will match you with the best options for you to choose from.*

O’Leary also says he used to advise students to pay their loans off first before saving for retirement, but he’s since changed his tune.

That might be a hard pill to swallow if you have a hefty sum of student debt, but it is possible to prioritize paying off your student loans by opting for a student loan refinance with Credible. A student loan refinance lets you take out a new loan with a lower interest rate or monthly payment. Then, you can use the new loan to pay off your existing debt and instead make monthly payments on your new, more affordable loan.

“You have to do both — pay your loans off and invest a portion of your income every year,” he says, explaining this strategy helps folks get into the discipline of saving money early on.

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.

Read more: Unlocking financial prosperity: Jeff Bezos shares the path to prime earnings through hassle-free real estate investment — don't miss out on this opportunity to revolutionize your financial future

Contributing 15% to your 401(k) each year

As of 2022, 69% 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 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. A platform such as Empower* can help you manage your money to ensure you feel confidently on track with your goals.

Empower offers a unique digital suite of finance tools designed to help you stay on top of your finances.

When you sign up for Empower, you have access to a free financial dashboard* where you can keep track of all your accounts in one place. From managing your money to tracking your goals and navigating your budget, Empower offers a single place to take a look at the scope of your finances.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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