Focus on First $100K to Retire Comfortably, Advisers Say

Americans need not aim for $1.5 million to retire comfortably, financial experts say. The key is reaching the first $100,000 in savings, which triggers compound interest’s power, according to late Berkshire Hathaway vice chairman Charlie Munger. “Once you cross $100,000, the compounding engine finally starts working in your favor,” he said at the 1998 annual meeting. At a 2% return, $100,000 earns $2,000 annually; invested in the S&P 500, it could yield $17,000 in 2025. Early savers benefit most: a person saving $5,000 yearly from age 25 for 10 years at 8% interest would have $787,000 by age 65—more than someone saving the same amount from age 35 for 30 years ($612,000). Time, not total contributions, drives results. Advisers stress starting early: enroll in employer 401(k) plans with automatic increases and maximize company matches. “Live below your means, save like a pessimist, invest like an optimist,” Munger advised. Discipline, not complexity, is the foundation of long-term wealth.