4 Money Moves Millennials Need to Make Now

Some of the oldest Millennials (born in 1981) are now 43 years old, while the youngest Millennials (born in 1996) are 28 years old. But Millennials still have time to become millionaires! Assuming that your investments in stocks, bonds, and other assets generate an average annual return of 8%, here’s how much Millennials need to save and invest to become millionaires:

• A 43-year-old starting with $0 in 2024 would have to invest $1,249 per month for the next 24 years.
• A 28-year-old starting with $0 in 2024 would have to invest $349 per month for the next 39 years.

Let’s look at what Millennials need to become millionaires – by making some smart money moves.

1. Open a Roth IRA or a traditional IRA

Even the oldest Millennials still have 24 years until they reach Social Security retirement age. That’s plenty of time for you to increase your professional earning power and increase your investments. If you’re already saving for retirement through your work, such as with a 401(k) plan, that’s great! Keep it up.

But most Millennials should also consider opening a Roth IRA or traditional IRA to save additional money for retirement beyond their 401(k). The traditional IRA allows you to take a tax deduction for the money you contribute, and the Roth IRA allows your money to grow tax-free and allows you to make tax-free withdrawals in retirement.

For 2024, you can invest up to $7,000 in IRAs (Roth and traditional IRAs combined). Are you ready to take your retirement planning to the next level? Check out our list of the best IRA accounts – and learn more about how these top brokerage firms can help you open an IRA to invest more money for retirement.

2. Open a broker account

Individuals with higher incomes or certain tax filing statuses do not qualify for a Roth IRA or cannot make tax-deductible contributions to a traditional IRA. If you can’t get tax breaks from an IRA or just need another pot of investment money that isn’t limited by retirement account rules, you can open a standard brokerage account.

The best online brokers and trading platforms make it easy to buy stocks, build an investment portfolio, and implement a variety of investment strategies. If you want to buy individual stocks, buy low-cost, diversified ETFs and mutual funds, or learn more about advanced trading strategies like options, opening a brokerage account for millennials can be a great way to delve deeper into investing and building wealth.

Want to try one of our top picks for the best broker accounts? Click here to find out more about it Self-Directed Investing from JP Morgan – an easy-to-use, commission-free brokerage from one of the most recognized brands in finance.

JP Morgan Self-Directed Investing offers fractional shares, thousands of investment options, and easy-to-use investment tools to help you build your portfolio. And you can get a bonus of up to $700 when you open a qualified new account by January 23, 2025.

3. Buy a house

You don’t have to be a homeowner to become a millionaire, but owning property can be a great way to turn your regular monthly housing payment into long-term wealth. Average annual percentage rates for 30-year fixed-rate mortgages have fallen by about 1.25% in the past year. Mortgages could become more affordable for millennials looking to buy their first home.

4. Earn a higher return on your savings account

The best way to become a millionaire is to continue buying stocks and other long-term investments that are expected to increase in value. But you shouldn’t invest every last dollar; You also need to keep some money in cash. And being a smart investor also means getting a reasonable return on your money.

The best savings accounts still pay nearly 5.00% APR, even after the Fed’s recent rate cut. Putting your emergency savings fund and other short-term cash in a high-interest bank account can help your money retain its value against inflation and motivate you to keep saving.

Conclusion

Even the oldest Millennials still have 24 years to save and invest for retirement. Millionaire status is within reach for Millennials if they can open IRA accounts and brokerage accounts, invest money on a regular monthly basis, and build wealth through home ownership.