Tips That Reveal What the Numbers Say About Becoming a Millionaire

For people between the ages of 25 and 34, the average retirement account balance is $42,640 and the median is $16,255.
For those between the ages of 35 and 44, the average balance is $103,552, and the median is $39,958.
If you want to be a millionaire when you retire, start as soon as you can, and stay consistent.

Millennials—those born between 1981 and 1996—are entering their peak earning years. However, with the rising cost of living, student debt, and housing challenges, it can be easy to feel that you’re behind on retirement savings.

The good news? Time and compounding are still on every millennial’s side. By maintaining consistent retirement account contributions and taking advantage of employer matching, a significant share of this generation could realistically retire as millionaires.

According to Vanguard’s How America Saves 2025 report, the defined contribution plan account balance for the typical millennial varies based on age. (The median is a middle-of-the-road number: Half of account balances are above this number, and half are below. The average, on the other hand, can be skewed by high or low numbers.)

What Millennials Have Saved in Defined Contribution Accounts
	Average	Median
25-34	$42,640	$16,255
35-44	$103,552	$39,958

We’re going to do two calculations based on the two age groups above (25–34 and 35–44) for the median millennial.

We’ll choose an age roughly in the middle of each of these groups: 30 (roughly the middle of the 25–34 age group) and 40 (roughly the middle of the 35–44 age group).

This is how much the median 30-year-old millennial today could have saved by age 65, considering the following figures:

Starting balance (the median defined contribution plan account balance of a 25 to 34 year-old): $16,255
Annual median salary: $57,356
Annual employee contribution: 8.7%
Annual employer contribution: 4.6%
Annual total contribution: 13.3% of salary ($7,628)
Assumed average annual return on investments: 7%
Investment period: 35 years (until age 65)

Based on the future value formula, here’s how much a 30-year-old’s existing $16,255 could be worth by age 65, if they didn’t add any more contributions to their account:

Future value formula: FV = PV × (1+r)ⁿ

FV = 16,255 × (1+0.07)³⁵ = about $173,548

Now, we can use the future value of an annuity formula, which accounts for ongoing yearly contributions:

Future value of an annuity formula: FV = P × (1+r)ⁿ − 1 / r

FV= $7628 × (1+0.07)^35 − 1 / 0.07 = about $1,054,471

So, if you add $173,548 plus $1,054,471, the median 30-year-old millennial could have about $1.23 million saved up by the time they reach age 65—so they’ll be a millionaire in 2055.

Doing the same calculation with an annual median salary of $64,844, a savings rate of 13.3%, and 25 years until retirement, we find that the median 40-year-old millennial could have about $762,329 saved up by the time they reach age 65—so they they won’t be a millionaire in 2055.

While contributing 13.3% of your income (including an employer match) is a strong start, gradual increases over time may help ensure millionaire status later on.

As a rule of thumb, consider raising your contributions by 1% to 2% annually, or whenever you receive a raise.

Small, consistent increases can compound substantially over time, especially when invested in diversified, low-cost index funds that track broad market performance.

Early withdrawals from 401(k)s or IRAs not only reduce compounding growth but also trigger taxes and penalties.

Withdrawals from retirement accounts before age 59 ½ may be subject to a 10% early distribution tax, with certain exceptions, such as death, disability, or the birth or adoption of a child.

If you treat your retirement accounts as untouchable, you’ll be more likely to stay on track to fit a seven-figure retirement account balance.

Managing or eliminating high-interest debt—such as credit cards or personal loans—ensures that more of each dollar can go toward investments rather than interest payments.

Relying solely on a workplace 401(k) may limit flexibility. Opening an IRA, Roth IRA, or taxable brokerage account in addition can expand investment options and provide access to funds before retirement age if needed.

Roth IRAs, for example, allow tax-free withdrawals once you reach age 59 ½, and contributions (but not earnings) can be withdrawn penalty-free earlier if necessary. Millennials who diversify across account types may be able to gain more control over their future tax liability and withdrawal strategy.

When looking at retirement, the median 30-year-old will be better off than the median 40-year-old—by a lot. Why is this, considering the median 30-year-old has less saved than the median 40-year-old, according to data from Vanguard?

It’s because younger millennials have more time. More time means more compound growth. So try to start early and stay disciplined—because time is the real driver of long-term wealth.

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