Who wants you to be a millionaire? No one

Thank goodness the mid-term elections are over and done with. I anticipate we’ll begin hearing about the upcoming 2016 election within the next few weeks and I, for one, can hardly wait.

I intentionally try to avoid being political in this column, but there’s something that really bothered me throughout the recent pre-election campaign. The television ads. Specifically, it was how they seemed to vilify anyone who had money.

The ads would have you believe that everyone who is considered wealthy is selfish and doesn’t care about the schools or the environment. As a financial adviser I’m taken aback by this growing perception of people who are financially well off think it’s unfair to routinely criticize someone just because they have money. There seems to be some sort of automatic assumption that they came into their money dishonestly or illegally.

But it’s just as likely that they attained their financial status because they worked hard during their careers. And they probably put their families first and were active in their communities.

Generally speaking, most people accumulated their wealth because they were dedicated savers who stayed committed to their financial goals throughout their careers.

Simple mathematics shows that it’s possible. For example, let’s say you were to save $1,000 per month in a tax-deferred account at five percent interest. If you did so every year throughout a 35-year work career, you’d have in excess of $1,000,000.

This is obviously a hypothetical example, but it illustrates that, although it may be difficult for many, it can be done. That being said, if you’re just in the early stages of your career and don’t have $1,000 a month, you should still get into the habit of saving whatever you can.

This is especially important if your employer’s retirement plan provides a match to your contribution. Then, as you age and hopefully have more disposable income, Uncle Sam will provide more incentives to save even more.

The maximum annual contribution into a 401(k) this year is $17,500. If you happen to be over age 50, you can actually contribute an additional $5,500. That’s $23,000. Next year, both numbers increase. The maximum 401(k) deposit is $18,000 with an additional $6,000 for those over 50. That’s $24,000. If you’re in a financial position to take advantage of these provisions, I strongly encourage you to do so.

One out of twelve households in the U.S. has a net worth in excess of $1,000,000, excluding the value of the principal residence. That translates into more than 9.5 million households. Of that 9.5 million, fewer than twenty percent inherited their wealth. In other words, wealth for the vast majority was earned, saved and invested. Which is to say, they made it happen.

There’s no question that a million dollars is a lot of money. But even if you were to have that much, there’s still no assurance you won’t encounter financial issues during retirement.

Keep in mind that, in retirement, health related issues could easily carve out a huge slice of a million dollars. And interest rates can have an adverse impact on a retirement nest egg if they continue to stay at today’s extremely low rates.

When all is said and done, attaining a million dollars is a goal that should be encouraged, not vilified.