A financial advisor suggests that it's not necessary to be a Silicon Valley entrepreneur to become a millionaire; here's how to retire one.

• Financial advisors claim that almost anyone can save $1 million for retirement with proper planning and discipline.
• According to Fidelity Investments, this year has seen the emergence of thousands of new millionaires in 401(k) plans and individual retirement accounts.
• Investors can benefit from starting early, as advisors suggest, by utilizing the power of compound interest.

Building a $1 million nest egg may seem an impossible feat.

Almost anyone can amass retirement wealth if they follow certain steps, financial advisors suggest.

Brad Klontz, a financial psychologist and certified financial planner, stated, "You may believe that in order to become wealthy, you must become a Silicon Valley entrepreneur."

Klontz, a member of the CNBC Financial Advisor Council and the CNBC Global Financial Wellness Advisory Board, stated that it is possible to become wealthy by working in the fast-food industry.

The calculus is simple, he said.

Klontz advised saving and investing a percentage of every dollar earned towards achieving financial freedom.

He stated that you can work almost any job and become a millionaire.

It's not necessarily a 'Herculean task'

Saving $1 million may seem daunting, but it might not be as difficult as you believe, according to Karen Wallace, a CFP and former director of investor education at Morningstar, in a 2021 article.

Experts recommend starting to save early, either in a 401(k) plan, individual retirement account, or taxable brokerage account, in order to take advantage of the power of compound interest over time. This means allowing your investments to do as much work as possible, as Wallace put it.

A Northwestern Mutual poll published in September found that 79% of American millionaires believe their net worth was self-made, while only 11% inherited their wealth and 6% received it through a windfall event like winning the lottery. The survey was conducted among 4,588 U.S. adults from January 3 to January 17, 2024.

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As of Sept. 30, Fidelity Investments, the largest administrator of workplace retirement plans, reported that 544,000 Americans had 401(k) balances of more than $1 million. Additionally, there were over 418,000 IRA millionaires.

The number of 401(k) millionaires increased by 9.5% or 47,000 people between the second and third quarter of 2024, mainly due to stock-market gains.

How to get to $1 million

Winnie Sun, a financial advisor, demonstrates the correlation between having $1 million in wealth and regular saving through an example of the math involved.

If a 30-year-old earns $60,000 after tax and saves $500 a month, or 10% of their annual income, they will have $1 million by age 70, assuming average market returns of 7%, she stated.

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Sun, co-founder of Sun Group Wealth Partners, stated that in 40 years, with a monthly contribution of $500, you will have more than $1 million, without doing anything else.

Sun advised avoiding debt, which is a significant obstacle to building savings, and to be cautious about increasing expenses.

Timing is more important than being perfect, Sun said.

Starting with a low-cost index fund, such as one that tracks the S&P 500, which diversifies savings across the largest publicly traded U.S. companies, is recommended.

""Taking action now can significantly speed up reaching the $1 million goal, even if it means waiting a year," Sun advised."

What is the right amount of savings?

Not everyone may require $1 million in retirement funds.

The 4% rule of thumb suggests that a typical retiree can safely withdraw $40,000 a year from a $1 million nest egg without running out of money in retirement, with the annual withdrawal adjusted for inflation.

For many, this sum would be supplemented by Social Security.

Fidelity recommends a retirement savings target based on income. Specifically, by age 67, a worker should aim to have saved 10 times their annual salary to achieve a comfortable retirement.

Financial planners commonly recommend that households aim to save 15% to 20% of their income.

The percentage of wealth you desire and the speed at which you want to become rich will determine the percentage, Klontz stated.

The FIRE movement, which aims for Financial Independence and Retirement at an early age, is characterized by individuals who save a significant portion of their income, with some striving for savings rates of up to 90%.

How do they do it?

"Klontz stated that instead of moving out of their parents' house, they minimized their possessions, didn't purchase new clothing, took the bus, and shaved their head instead of paying for haircuts. He added that there are various ways to achieve faster results."

How to enjoy today and save for tomorrow

There is a tension for those who want to enjoy life now and save for the future.

"Sun stated, "Our purpose was not just to exist and accumulate funds; we must also strive for a balanced and fulfilling life.""

Allocate 20% of household expenses to the things that are most important to you, such as big vacations, fancy cars, or the newest technology, advised Sun.

She said that by "scrimping and saving" on 80% of household costs, savers can feel like they're not sacrificing their quality of life.