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“I Want to be a Millionaire!”

That is what I heard a teenage boy tell his friends as they strolled past me in the mall. Once upon a time, millionaires were considered the cream of the crop, the best of the best. These highly regarded and intelligent individuals had a knack for making money … but not for keeping it much of a secret.

As I continued my walk, I started thinking about this boy making a million dollars and how he can get started. But the first thing I noticed about him was he seemed like the happy-go-lucky type, which is an important pre-requisite: enjoy a happy life before making your first million.

Remember the old adage: “Money won’t buy happiness”? It’s true. Be happy first.

A Good First Step for a Teenager

Let’s say he is a 15 year-old boy who opens a Roth IRA and deposits $100 in year 1. Then, in year 2, he increases the deposit by $100. In year 3, he increases the deposit by $100 = $300, and so on.

It might not seem like a lot to us, but it is for a teenager to diligently put away $100 for the next 51 years! You read that correctly: 51 years.

By the time he reaches 66, his Roth IRA will have accumulated $1 million—and he never had to save more than $5,200 in any year. It is a learned and maintained discipline by highly motivated individuals, which benefits him or her in other areas of their lives as well.

Save Small and End Large

In general, as you age, the required savings increases, but young adults in their 20’s can and should still save small and end large. For example, how difficult is it for someone aged 25 to save $250 a year?

Using simple math, he or she would only need to save a little under $5 a week to equal $250 a year. Having said that, increase that $250 by $250 a year to hit $1 million by age 66.

The government is on your side. It provides great incentives for those willing to start early.

For individuals 18 or older who qualify, the Savers Credit provides a 50% tax credit for IRA contributions. So, a $1,000 deposit to your IRA could net you $500 in tax savings above and beyond the regular tax savings from a traditional IRA. To claim the credit, use Form 8880.

I would be happy to answer any questions you may have. Feel free to contact me below.

Jayme is a Chartered Financial Analyst, received his Masters in Business Administration from Carnegie Mellon University’s prestigious Tepper School of Business, and holds a Bachelors of Science in Business Finance from Saint Vincent College. He can be reached at 412-434-0990, ext. 1578 or at

DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.

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