Having a million-dollar portfolio is a retirement dream for many people. Making that dream come true requires some serious effort. While success is never a sure thing, the 10 steps outlined below will go a long way toward helping you achieve your objective.

1. Set a Goal

Nobody plans to fail, but plenty of people fail to plan. It’s a cliché, but it’s true. Making a plan is the leading self-help advice from athletes, business moguls, and everyday people who have achieved extraordinary goals. 

Key Takeaways

  • To retire as a millionaire, the first thing you need is a proper retirement plan for the long haul.
  • Employer-sponsored retirement accounts where your company matches your contributions are a great way to sock away cash.
  • Stick to your budget and spend within your means, avoiding debilitating credit card debt.

2. Start Saving

If you don’t save, you’ll never reach your goal. As obvious as this might seem, far too many people never even start to save. If your employer offers a 401(k) plan, enrolling in it is a great way to put your savings on auto-pilot. Simply sign up for the plan, and contributions will be automatically taken out of your paycheck, increasing your savings and decreasing your immediate tax liability.

Always have an emergency fund at the ready for unplanned expenses.

If your employer offers to match your contributions up to a certain percentage, be sure to contribute enough to get the full match. It’s like getting a guaranteed return on your investment. Finding the cash to stash may be a challenge, particularly when you’re young, but don’t let that stop you from pursuing future riches. And remember that the younger you start, the more time your money has to grow.

3. Get Aggressive

Studies have shown that the majority of the returns generated by an investment are dictated by asset allocation. If you are looking to grow your wealth over time, fixed-income investments, such as annuities, which offer fixed payments that can neither grow nor shrink, aren’t likely to get the job done. Why? Because inflation can take a big chunk out of your savings.

Investing in equities entails more risk, but is also statistically likely to lead to greater returns. For many of us, it's a risk we have to take if want to see our wealth grow. Asset-allocation strategies can help you learn how to make picking the right mix of securities the core of your investing strategy. 

2:07

10 Steps to Retiring as a Millionaire

4. Prepare for Rainy Days

Part of long-term planning involves accepting the idea that setbacks will occur. If you are not prepared, these setbacks can put a stop to your savings efforts. While you can’t avoid all of the bumps in the road, you can prepare in advance to mitigate the damage they can do by always maintaining an emergency fund. This fund will also help keep you from building up credit card debt or prematurely tapping your retirement funds, two ways people pay for emergencies that can undercut their financial security.

5. Save More

Your income should rise as time passes. You’ll get raises, change jobs, and maybe get married and become a two-income family. Every time your salary rises, so should the amount that you save. The key to reaching your goal as quickly as possible is to save as much as you can. 

6. Watch Your Spending

Vacations, cars, kids, and all of life’s other expenses take a big chunk out of your paycheck. To maximize your savings, you need to minimize your spending. Buying a home you can afford and living a lifestyle that is below your means and not funded by credit cards are necessities if you want to boost your savings. 

7. Monitor Your Portfolio

There's no need to obsess over every movement of the Dow Jones Industrial Average. Instead, check your portfolio once a year. Rebalance your asset allocation to keep on track with your plan. 

8. Max Out Your Options

Take advantage of every savings opportunity that comes your way. Make the maximum contribution to tax-deferred savings plans, then open up a taxable investment account, too. Don’t let any chance to save get away.

9. Catch-Up Contributions

When you reach age 50, you are eligible to increase your contributions to tax-deferred savings plans. The IRS calls this a "catch-up contribution." Make sure to take advantage of the opportunity. 

10. Have Patience

Get-rich-quick schemes are usually just that—schemes. The power of compounding takes time, so invest early and often, and accept that the road to riches is often long and slow. With that in mind, the sooner you get started, the better your odds of achieving your goals. 

The Bottom Line

Retirement might seem far away, but when it arrives nobody ever complains about having too much money. Some people even question whether a million is enough. Test that theory by figuring out whether your retirement income goal still makes sense. That said, with lots of planning and discipline, you can reach your retirement goals and live a comfortable life after work.