Becoming a millionaire may seem like a far-off dream, especially to younger people, but with time and the right approach, it can be more achievable than you think. FOX Business' Maria Bartiromo and personal finance expert Rachel Cruze recently shared a top strategy for making it happen.
Read More: Want To Make It to the Forbes Richest List? Here Are 10 Steps To Build Your Wealth
Find Out: 5 Subtly Genius Moves All Wealthy People Make With Their Money
You might be able to grow your savings to over $1 million with Cruze's advice.
Cruze and Bartiromo believe the key to becoming a millionaire is participating in your employer's 401(k) plan.
You may have heard of a "401(k) millionaire," someone with a 401(k) balance of at least $1 million. According to Fidelity Investments' latest retirement analysis data, the number of people achieving this goal is rising. Fidelity notes these millionaires "reach this level of retirement savings by starting early and contributing consistently over many years."
Investing in a 401(k) doesn't require a lot of money to start, and it offers several advantages that may help your savings grow faster than other account types.
Discover Next: Here's the Minimum Salary Required To Be Considered Upper-Middle Class in 2025
Many employers offer a 401(k) match, contributing money to their employees' accounts. This extra money can significantly boost your savings over time. According to Fidelity, 85% of the companies whose 401(k)s it serves offer a contribution match. The match amount differs from company to company, but Fidelity's plans typically use a formula matching 100% of the first 3% of the planholder's contribution and 50% of the next 2%.
A 401(k) plan offers various investment options, and you decide how to distribute your funds. The earnings from these investments are reinvested, which means you benefit from compound returns, similar to compound interest, so your returns generate even more returns.
401(k) contributions are often automatically deducted from your paycheck. You don't have to rely on willpower to set that money aside.
To become a 401(k) millionaire, avoiding withdrawing money too early is crucial. If you take it out before you're 59 1/2, you'll miss out on potential growth and face penalties and taxes.
Retirement accounts come with contribution limits. For example, in 2025, you can contribute up to $23,500 to a 401(k), not counting employer-matched contributions. If you're 50 or older, you're allowed to contribute more. If you're maxing out your 401(k), Cruze recommends also investing in a Roth IRA. You can contribute up to $7,000 annually to an IRA or $8,000 if you're 50 or older.