Finance

Almost anyone can save $1 million for retirement, according to financial advisors.
There have been thousands of new 401(k) plan and individual retirement account millionaires this year, according to Fidelity Investments.
Starting early is key, advisors say. This lets investors harness the power of compound interest.

Goran Babic | E+ | Getty Images

Building a $1 million nest egg may seem an impossible feat.
However, amassing such retirement wealth is within reach for almost anyone — provided they take certain steps, financial advisors say.

“You might think that, ‘Well, I have to become a Silicon Valley entrepreneur to become rich,'” said Brad Klontz, a financial psychologist and certified financial planner.

In fact, you can be a fast-food worker your whole life and amass wealth, said Klontz, a member of the CNBC Financial Advisor Council and the CNBC Global Financial Wellness Advisory Board.
The calculus is simple, he said.
Every time you’re paid a dollar, save and invest a percentage toward your “financial freedom,” Klontz said.
With this mindset, “you can work almost any job and retire a millionaire,” he said.

It’s not necessarily a ‘Herculean task’

Saving $1 million may sound like a “Herculean task” but it “might not be as hard as you think,” Karen Wallace, a CFP and former director of investor education at Morningstar, wrote in 2021.

The key is to start saving early, perhaps in a 401(k) plan, individual retirement account or taxable brokerage account, experts said. This allows investors to harness the magic of compound interest over decades. In other words, you “let your investments do as much heavy lifting as possible,” Wallace wrote.
About 79% of American millionaires say their net worth was “self-made,” according to a Northwestern Mutual poll published in September. Just 11% said they inherited their wealth, while 6% got it from a windfall event like winning the lottery, according to the survey of 4,588 U.S. adults, fielded from Jan. 3 to Jan. 17, 2024.
More from Personal Finance:IRS: There’s a key deadline approaching for RMDsEgg prices may soon ‘flirt with record highs’Federal Reserve is likely to cut interest rates next week
There were 544,000 Americans with 401(k) balances of more than $1 million as of Sept. 30, according to Fidelity Investments, which is the largest administrator of workplace retirement plans. There were also more than 418,000 IRA millionaires.
In fact, the number of 401(k) millionaires grew by 9.5%, or 47,000 people, between the second and third quarter of 2024, largely due to stock-market gains.

How to get to $1 million

Wera Rodsawang | Moment | Getty Images

Winnie Sun, a financial advisor, provides an example of the math that links $1 million of wealth with consistent saving.
Let’s say a 30-year-old makes $60,000 a year after tax. If they were to save $500 a month — or, 10% of their annual income — they’d have $1 million by age 70, assuming average market returns of 7%, she said.
This doesn’t account for financial factors that might boost savings over that period, like a company 401(k) match, bonuses or raises.

You can work almost any job and retire a millionaire.

Brad Klontz
financial psychologist and certified financial planner

“In 40 years, you’ll have over $1 million, and that’s doing nothing else but $500 a month,” said Sun, co-founder of Sun Group Wealth Partners, based in Irvine, California, and a member of CNBC’s Financial Advisor Council.
It’s also important to avoid debt, which is probably the “biggest cavity” for building savings, and try not to increase expenses too much, Sun explained.
Timing is more important than being perfect, Sun said.
She recommends starting with a low-cost index fund — like one tracking the S&P 500, which diversifies savings across the largest publicly traded U.S. companies — and building from there.
“Even waiting a year can make a dramatic difference in reaching that $1 million point,” Sun said. “Stop and take action.”

What is the right amount of savings?

Damircudic | E+ | Getty Images

Of course, $1 million in retirement may not be the right amount for everyone.
An oft-cited rule of thumb — known as the 4% rule — indicates a typical retiree can draw about $40,000 a year from a $1 million nest egg in order to safely assume they won’t run out of money in retirement. (That annual withdrawal is adjusted annually for inflation.)
For many, this sum would be supplemented by Social Security.
Fidelity suggests a savings goal based on income. For example, by age 67 a worker should aim to have saved 10 times their annual salary to ensure for a comfortable retirement.
Ideally, households would aim to save 15% to 20% of their income, Sun said. This is a rule of thumb often cited by financial planners.

How much wealth you want — and how quickly you want to be rich — will determine the percentage, Klontz said.
He’s personally aimed for a 30% savings rate, but knows people who’ve shot for close to 90%. Saving such large chunks of one’s income is a common thread of the so-called FIRE movement, which stands for Financial Independence, Retire Early.
How do they do it?
“They didn’t move out of their parents’ house, they minimized everything, they don’t buy new clothes, they take the bus, they shave their head instead of paying for haircuts,” Klontz said. “There’s all sorts of hacks you can do if you want to get there faster.”

How to enjoy today and save for tomorrow

Of course, there’s a tension here for people who want to enjoy life today and save for tomorrow.
“We weren’t meant to only survive and save money,” Sun said. “There has to be that good quality of life and that happy medium.”

One strategy is to allocate 20% of household expenses toward the thing or things that are most important to you — perhaps big vacations, fancy cars, or the newest technology, Sun said.
Make some concessions — i.e., “scrimp and save” — on the other 80% of household costs, she said. This helps savers feel like they’re not reducing their quality of life, she said. More

Flushing Financial, a New York-based commercial real estate lender, is seeking to raise $70 million to shore up its capital, CNBC has learned.
The bank’s CEO, John Buran, has told potential investors that he intends to sell low-yielding bonds and loans backed by commercial real estate, including multifamily building loans, moves that would generate a loss and necessitate the sale of fresh stock, people with knowledge of the deal told CNBC.
Flushing had about $9.3 billion in assets as of September.

Flushing Bank in New York City.
Google Earth

Flushing Financial, a New York-based commercial real estate lender, is seeking to raise $70 million to shore up its capital, CNBC has learned.
The bank’s CEO, John Buran, has told potential investors that he intends to sell low-yielding bonds and loans backed by commercial real estate, including multifamily buildings, moves that would generate a loss and necessitate the sale of fresh stock, people with knowledge of the deal told CNBC.

Bankers working on the deal have yet to finalize pricing, but it will likely be between $15 to $15.50 per share, according to one of the people, below the $17.25 level the stock closed at on Thursday.
The bank declined to comment to CNBC earlier Thursday, but later issued a release confirming the equity sale.
Banks with commercial real estate exposure have struggled after the Federal Reserve hiked interest rates through 2023, leaving them with unrealized losses on their balance sheet. New York Community Bank was forced to raise capital earlier this year after its stock sank amid concerns over its portfolio of commercial loans.
Most of the U.S. banks under pressure are community banks with under $10 billion in assets, like Flushing, which had about $9.3 billion in assets as of September.
Now, with a rebound in bank stock prices this year and the start of a Fed easing cycle in September, investors expect more banks to raise capital in the coming months. Behind the scenes, regulators have been prodding banks with confidential orders to improve capital levels.

“The rate environment is still a challenge, but we’re controlling what we can control and setting the foundation for a better future,” Buran told analysts in October.
Shares of Flushing Financial have risen about 5% this year through Thursday, trailing the 18% rise in the KBW Regional Banking Index. More

“I don’t want to get into a situation where they do and we have a dip or something because that can always happen,” Trump told CNBC’s Jim Cramer on “Squawk on the Street.”
Trump repeatedly used the stock market as a performance barometer during his first term.

After ringing the opening bell at the New York Stock Exchange on Thursday, President-elect Donald Trump stopped short of telling investors to buy more stock as he gets set to take office.
“I don’t want to get into a situation where they do and we have a dip or something because that can always happen,” Trump told CNBC’s Jim Cramer on “Squawk on the Street.”

Trump repeatedly used the stock market as a performance barometer during his first term. During that time, the S&P 500 scaled nearly 68%, reaching all-time highs. Part of that was due to corporate tax cuts passed by the administration at the time. The Federal Reserve also maintained interest rates close to historical lows back then as it tried to spur inflation, also boosting stock prices.

President-elect Donald Trump is greeted by traders as he walks the floor of the New York Stock Exchange on Dec. 12, 2024.
Alex Brandon | AP

He touted at the exchange on Thursday the possibility of lowering taxes again. “We’re gonna do things that haven’t really been done before. We’re gonna cut taxes still further,” he said. “You pay 21% if you don’t build here. If you do, we’re going to try and get it to 15%, but you have to build your product, make your product in the USA.”
Wall Street CEOs and investors such as Goldman Sachs’ David Solomon and Pershing Square’s Bill Ackman came to the New York Stock Exchange for Trump’s bell-ringing ceremony. Ackman told CNBC later that “most of the country understands that the more successful businesses are, the more the stock market goes up, the more that their wages rise, the more job growth, the more opportunity, the more businesses who come to this country, it lifts all boats.”
While Trump refrained from telling investors to buy stocks now, he maintained a bullish outlook longer term.
“I think long term this is going to be a country like no other. We had the three best years ever until Covid came,” he said after being named Time Magazine’s “Person of the Year.”
— Additional reporting by CNBC’s Yun Li. More

The Consumer Financial Protection Bureau on Thursday announced the final version of a rule limiting banks’ ability to charge overdraft fees.
It says the rule will save American consumers $5 billion annually.
The CFPB said that its overdraft rule will take effect Oct. 1, 2025, though its ultimate fate is unclear.

Rohit Chopra, director of the CFPB, testifies during a House Financial Services Committee hearing on June 14, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images

The Consumer Financial Protection Bureau on Thursday announced the final version of a rule limiting banks’ ability to charge overdraft fees. It says the rule will save American consumers $5 billion annually.
The regulator said that banks could opt to charge $5 for overdrafts — a steep drop from the average fee of around $35 per transaction — or limit the fee to an amount that covers the lenders’ costs, or charge any fee while disclosing the interest rate of the loan.

“For far too long, the largest banks have exploited a legal loophole that has drained billions of dollars from Americans’ deposit accounts,” CFPB Director Rohit Chopra said in a statement. “The CFPB is cracking down on these excessive junk fees and requiring big banks to come clean about the interest rate they’re charging on overdraft loans.”
While overdraft fees have been a lucrative line item for the industry, generating $280 billion in revenue since 2000 according to the CFPB, banks’ revenue from the service has been on the decline. That’s because lenders including JPMorgan Chase and Bank of America have either reduced the fees or limited the types of transactions that trigger them, while some banks dropped the fee altogether.
The CFPB rule applies to banks and credit unions with at least $10 billion in assets.
The effort, part of a flurry of activity from the CFPB in the waning days of the Biden administration, faces stiff opposition from U.S. banking groups that have successfully stymied other efforts from the regulator. For instance, a rule capping credit card late fees at $8 per incident that was set to take effect in May has been held up in federal court.
The CFPB said that its overdraft rule will take effect Oct. 1, 2025, though its ultimate fate is unclear.

Even before the election victory of Donald Trump last month, the fate of the overdraft rule would’ve been murky, thanks to industry pushback. But Trump is expected to install a new CFPB head next month that is unlikely to support Biden-era efforts to rein in banking activity.
Bank lobbying groups have argued that the overdraft rule, first proposed in January as part of Biden’s war on junk fees, would reduce access to overdraft services and could send customers to worse alternatives like payday loans.
The Consumer Bankers Association said Thursday it was “exploring all options” to push back against the rule.
This story is developing. Please check back for updates. More

Impoverished countries do not have much in common. Half the population of Niger, a landlocked African nation beset by military coups, live in extreme poverty, eight in ten people have no access to electricity and GDP per person is just $620. By contrast, the average Bangladeshi is four times richer, and just one in 18 is among the world’s poorest. The country’s policymakers do not have to worry about simply providing power. They want to attract foreign capital to build renewable energy, so as to reduce reliance on coal. More

A lot is riding on the numbers after the decimal point. In the argot of investors, inflation in America is back to having a “two-handle” (that is, running above 2% but below 3%). It is a far better position to be in than a couple of years ago, when price rises were threatening to hit double digits. But there is a big difference between inflation decelerating towards 2% in the coming year or getting stuck nearer 3%. Not only would the latter forestall aggressive interest-rate cuts by the Federal Reserve, it would also put the central bank on a collision course with Donald Trump—a double-whammy of monetary hawkishness and political turbulence that would cast a shadow over the global economy. More

At this time of year, many policymakers want to know how fast their economies will grow in the year ahead. China’s leaders set themselves a still tougher question: how fast their economy “should” grow. They are seeking not a forecast but a target. More

BITCOIN IS BACK. Since Donald Trump’s election victory on November 5th, the world’s dominant cryptocurrency has surged to new heights above $100,000 a unit, enjoying a rise of 138% since the start of the year. Altogether, the world’s cryptocurrencies now have a market capitalisation of almost $4trn—making them more valuable than the entirety of Britain’s stockmarket. More