What Does It Really Take to Retire Rich?

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Building your retirement nest egg? Are you on track or lagging behind? Are you willing to settle for just getting by when you quit your job, or do you want to retire super wealthy?

Some people would rather retire early than rich, while others just want to be happy in their old age, no matter how much is in the bank. If that’s not you, and retiring rich is your end game, it’s time to get to work and put a plan in place (assuming you haven't already).

Unfortunately, few Americans retire with substantial wealth. Only 0.1% of retirees have amassed $5 million or more in their retirement accounts, with most falling short of the $1.26 million 'magic number' needed for a comfortable retirement, according to Northwestern Mutual’s 2025 Planning & Progress Study.

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A reality check from the most recent data by the Survey of Consumer Finances (SCF) and Empower only reinforces the "few retire rich" point: Median retirement savings hover around $87,000 to $200,000, and even for those in their 60s and 70s, typical 401(k) or IRA balances are far below $1M, with only about 3.2% hitting $1M or more in retirement accounts.

So, what does it really take to retire rich?

It starts with a strong financial foundation

A solid financial plan is the secret sauce for long-term success and stability. “To retire with a large amount of wealth typically requires time, says Dr. Stephan Shipe, Ph.D., CFA, CFP®, and founder of Scholar Financial Advising. “While there are great stories of windfalls from a business sale or a long-lost uncle leaving an inheritance, most wealth is generated by starting with a plan early and consistently allocating cash.”

Along with a certain amount of patience and tenacity, it's also important to understand the fundamental concepts of budgeting, income management, tracking expenses, saving and investing and reducing debt.

Shipe goes on to say that setting aside money in the early years can be difficult because there’s no instant gratification. "You save and save, but make little headway. Even good market years feel like you’re not making progress." A strong financial base is the result of smart choices that make your money work for you, not vice versa.

As investors, the rich know a fair amount about limiting exposure and minimizing risk. While speaking to graduate students at Columbia University’s Business School in New York City, Warren Buffett once said that “risk comes from not knowing what you’re doing.” So, it makes sense that the more you educate yourself about personal finance, the more security you’ll have as you minimize risks.

The secret is consistency

In tough economic times, retirees and soon-to-be retirees can’t help but get anxious about what’s ahead. Maybe you’ve scrimped and saved for decades, hoping you’ll enjoy a relaxing and rewarding retirement. But frankly, it's impossible to know, especially when you’re young, what the economy will be like when you reach 65, 70 or whatever retirement age you set for yourself.

Shipe underlines the fact that early on in your career, you may get pulled toward other financial goals, like a down payment on a home or saving for college, so thoughts of retirement often fall to the bottom of the list. “The secret is consistency and automation. You have to accept that these competing goals will always exist, and that’s why it’s important to save first, ideally through your 401(k) before you even receive your paycheck."

Low price for high value

Buffett also said, “Price is what you pay; value is what you get.” Wise man. Value is the monetary, material or assessed worth of an asset, good or service. But when you pay a high price for something, such as high interest on credit card debt, and it doesn’t match the value you get, you’ve overpaid.

Instead, look for opportunities to get more value at a lower price, like when high-value merchandise is marked down. or choosing undervalued stocks or sectors for long-term investing. Focus on durability and avoid impulse buys, and if investing, choose low-fee index funds or take time to gain a keen understanding of how the rich invest.

Keep some cash on hand

Most experts agree that keeping some cash on hand is smart rather than tying it all up in investments. A good rule of thumb is to have three to six months’ worth of living expenses in an emergency fund that you can easily access, like a high-yield savings account. This can help cover unexpected costs without forcing you to sell investments at a bad time, like when stocks drop or interest rates fall.

Investing everything can leave you vulnerable if markets dip and you need cash fast — selling at a loss stinks. Plus, cash gives you flexibility to seize opportunities, like a discounted purchase or a sudden investment deal. On the flip side, too much cash sitting idle loses value to inflation, so once your emergency fund is set, invest the rest in diversified assets (stocks, bonds, real estate) to grow your wealth. Balance is key: enough cash for peace of mind, but not so much that it’s just gathering dust.

Invest in you

Anytime you invest in yourself, it comes back tenfold. So, is there a secret to growing your own potential? Certified Financial Planner, Andrew Latham, says, “Yes, but it’s not glamorous.” He advises people to start early, keep it simple and not sabotage themselves. “The real wealth gap isn’t income, it’s behavior over time. Retiring rich or at least comfortable is entirely within reach for most people, if they just avoid the things that can take them out of the game. Another thing: start early enough.”

Have multiple investment streams

One way to retire rich is to have interest work for you, rather than working to pay interest. Gary Gray, Co-Founder at CouponChief.com, says that the people who retire rich are not obsessively frugal or brilliant investors; they're just steady.

“They continue to put money into things they understand," he says. "By the time you're 50, you need multiple income streams, not just a pile of money sitting in a bank account. The best plan is to start early, keep it boring, and focus on ownership, whether stocks, property, or a little business.”

View retirement as a long game

Building wealth and a self-sustaining retirement takes time, and you may encounter financial challenges along the way. Latham suggests practicing retirement before it happens. “Try living on your projected retirement income for six months. Max out your HSA and invest it for future healthcare costs. Focus on sleep-friendly strategies like paying off a mortgage early or using a portion of savings for income annuities.

He adds that a shift from wealth-building to wealth-protection in your 50s can help ensure a secure retirement for years. “And most importantly, build the discipline to sit still when markets get rough — reaction is often more damaging than inaction. Viewing your finances in retirement as a lifelong game can help you stay on course despite the inevitable hardships you may face. That’s a financial foundation that will last."

What it means to retire rich

Although it's said that money can’t buy happiness, it can buy certain freedoms, independence and a little breathing space — all of which enhance your joy in your golden years.

While your net worth defines your financial standing, true retirement wealth goes beyond the money in your accounts or your assets. It also includes a sense of freedom and security from intentional financial planning and a life well-lived.

The wealthy recognize that knowledge is only half the battle, says Greg Luken, founder and wealth advisor at Luken Wealth Management. “You can read all the books, attend all the seminars, and strategize endlessly — but without action, nothing changes. Execution is the bridge between dreams and reality, between financial struggles and financial success."

So, whether you’re in the 30th or 99th percentile, retirement wealth is strongly affected by thoughtful decision-making and a clear vision for the future. Understanding where you stand today can help you chart a course toward a retirement that aligns with your aspirations and values.

Retire rich: Work hard now so you can play hard later.

For the past 18+ years, Kathryn has highlighted the humanity in personal finance by shaping stories that identify the opportunities and obstacles in managing a person's finances. All the same, she’ll jump on other equally important topics if needed. Kathryn graduated with a degree in Journalism and lives in Duluth, Minnesota. She joined Kiplinger in 2023 as a contributor.