From zero to $ 1 million in 20 years

American workers are not saving enough for retirement. According to the Employee Benefit Research Institute, more than half of American workers have saved less than $ 25,000 for retirement. A quarter of Americans aged 65 to 74, reports the US Census Bureau, continue to work after retirement age.

If you are among the millions of Americans who work, have little or no savings for retirement, and earn less than $ 50,000 per year. Here are two simple savings plans that will allow you to easily go from zero savings to $ 1 million in 20 years. The $ 500 plan and save your raise.

The $ 500 plan

Starting with zero savings, you can easily save $ 1 million in 20 years by following this simple method. Start saving just $ 500 per month and then next year, and each year after that, increase your monthly savings by $ 100. So next year you’ll save $ 600 per month, next year $ 700 per month, and after 20 years you will have $ 1 million.

That’s it, that’s it, nothing extremely complicated. If you start saving $ 1,000 per month and increase your monthly savings by $ 100 each year for the next 20 years, you will have $ 1.5 million to spend in retirement.

What if you can’t save money? Can’t even afford to save $ 100 a month for retirement? Are your current living expenses absorbing all of your salary? There’s a way to save even more for retirement than the $ 500 monthly plan: save your raise.

Save your increase

If you make just $ 45,000 per year, and every year you get a 5% raise, save your raise and don’t spend the extra income, and after 20 years you’ll have $ 1 million.

If you make more than $ 45,000 per year and use the Save Your Raise method, you will end up with more than $ 1 million after 20 years. Starting with an annual salary of $ 75,000, using the Save Your Raise method, you will end up with $ 1.5 million after 20 years.

And you don’t need to be an investment guru or put your savings in high-risk investments to reach $ 1 million in 20 years. With both plans, savings were invested using an asset allocation model of 75% S&P Index Fund and 25% Treasury Direct, the historical average annual return using this model is 9%.

With these two methods of savings plans, almost anyone, even someone who has no savings, can become a millionaire in just 20 years. Starting with a very small amount of savings and a patient and committed investment approach, millions of American workers can look forward to a comfortable and secure retirement.