Despite challenging economic conditions, the U.S. keeps producing more millionaires. The total number of U.S.-based millionaires more than doubled from 2020 to 2023, reaching nearly 22 million individuals.
How have so many people reached this major financial milestone? It wasn't through get-rich-quick trends like going all in on crypto or launching an app. Most people are achieving the American dream by prioritizing their retirement savings.
First, let's clear up what it means to be a millionaire. Sure, being a millionaire implies you've accumulated at least a million dollars, but there's a little more nuance to it than that.
By definition, a millionaire is someone whose net worth is at least $1 million, meaning the total value of all their assets (cash, property, investments) minus their outstanding debt is $1 million or more. The term is quite broad since it includes anyone with assets of at least $1 million but less than $1 billion.
Does being a millionaire mean you're set for life? Not necessarily. In the past, being a millionaire meant you were rich, but the value of $1 million has dwindled over time due to inflation. For example, you'd need over $1.6 million in 2025 to have the same spending power you did with $1 million in 2005.
Being a millionaire doesn't exactly ensure happiness, either. According to one study, happiness peaks when your salary reaches $100,000 per year.
Still, increasing your net worth can help you overcome financial challenges, like depending on Social Security as your sole source of income during retirement. It can also give you a greater sense of autonomy over your own circumstances.
Read more: How much money is considered rich?
So what's the most surefire way to amass $1 million? Most people who become millionaires in the U.S. reach this milestone in a very simple way: by making automatic contributions to a retirement account from every single paycheck over many years.
Surprised to hear that? This method certainly lacks the appeal of a get-rich-quick scheme, but here are a few reasons why consistent retirement contributions work so well:
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Underspending: Automatic contributions from each paycheck help you prioritize saving money and teach you to live off less than your full income.
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Staying level-headed: Consistent investing helps you see the bigger picture and reduces the temptation to make impulsive (and expensive) moves based on headlines and trends.
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Free money: Many retirement plans come with an employer match. In other words, when you contribute, your employer puts free money into your account.
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Risk-based adjustments: The majority of retirement plans automatically adjust your portfolio based on your age and when you plan to retire, also known as target-date investing.
It might sound counterintuitive, but there are certain financial goals that should be prioritized over retirement savings.
If you're carrying high-interest debt (i.e., credit cards), pay them off as soon as possible. When you do, you'll eliminate the high-interest charges that eat up investment returns in your retirement account.
Then, put some money into emergency savings. This way, you won't be tempted to make an expensive early withdrawal from your retirement account when a financial emergency comes up.
Read more: How much money should I have in an emergency savings account?
The sooner you start contributing to your retirement account, the more time your money has to grow.
If your employer offers a 401(k) or other retirement plan, enroll right away and set up a recurring contribution from your paycheck, even if it's a small amount — if you have access to an employer match, even better, since this puts free money into your retirement savings.
If your employer doesn't sponsor a retirement plan, you can open a solo 401(k) and/or an IRA.
Read more: 401(k) vs. IRA: The differences and how to choose which is right for you
If you want your retirement savings to be worth $1 million by the age of 65, here's roughly how much you need to contribute at each age (assuming an 8% average return and not including plan fees):
If you're hesitant about putting money into retirement, start small. Then, aim to increase your contribution at least once a year. Here are a few ways to make sure you can do that:
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Income increases: Make it a goal to raise your income annually, whether through a pay raise, a promotion, a side hustle, or by switching jobs. Continuing education can help too, since earning a degree strongly correlates to income growth and net worth. However you go about increasing your income, be sure to increase your retirement contribution instead of your spending.
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Lower expenses: Whenever your expenses decrease, automatically roll the extra cash into your retirement contribution. For example, if you have a car loan with a payment of $250 per month, add that $250 to your monthly 401(k) contribution once the loan is paid off.
Ideally, you want to be able to contribute the maximum amount allowed each year. For 2025, the maximum contribution for 401(k)s, 403(b)s, and Thrift Savings Plans (TSPs) is $23,500 for people under 50 and $30,500 for people 50 and older.
When you change jobs, don't forget to take your retirement savings with you. Sure, you can leave your money in the account provided by your old employer, but there are major benefits to rolling it over into a new 401(k) or IRA, including:
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You might have to pay higher fees on the old account after leaving the employer.
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You can no longer contribute to the old plan.
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You'll have fewer accounts to manage.
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You can avoid any trouble accessing the old plan.
Investing in retirement is the main way Americans are building wealth, but it's not the only way. Another big driver for net worth growth is owning a primary residence.
Buying and owning a home isn't cheap; you'll need to cover a down payment, closing costs, property maintenance, and more. But it can pay off in the long run.
If you don't have enough money to buy a home, look into first-time homebuyer (FTHB) programs through your state or a local agency. As long as you haven't owned your residence in the past three years, you could potentially qualify for FTHB assistance.
Read more: Saving to buy a house? Here's where you should park your down payment money
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