I'm 54 with no retirement savings: a financial advisor says I can still become a millionaire by 67

A 54-year-old with no retirement savings and no house calls for help with retirement planning. The proposed plan is to save 15% of gross income into growth stock mutual funds inside a retirement plan for about 10 to 12 years, continuing until ages 65 to 67. The plan’s success depends on the assumed annual rate of return. With roughly 12% annualized returns, the contributions can reach around $1 million by 67. If returns are closer to 8% after fees and sequence risk, the same contributions can produce only about $300,000 to $400,000. The assumed return rate is the key variable determining the outcome.

"“If you save 15% of your gross annually into good growth stock mutual funds inside of your retirement plan, now you're in Canada, so it's a little different, but still you can do all of that. And you do that for 10 or 12 years, you're 55 at the point you start and you do it to 65, 67, you're going to be a millionaire. You're going to be fine,” the host said."

"“The promise of a million by 67 depends entirely on a return assumption Ramsey rarely states: roughly 12% annualized. That figure makes the math work. It is also higher than what the broad market has historically delivered.”"

"“Over the past decade, the S&P 500 returned roughly 263% in price terms, roughly 14% annualized in an unusually strong stretch. Including dividends, the long-run historical average for U.S. stocks sits closer to 10%. Use 10%, and the same plan produces a meaningfully smaller nest egg.”"

"“Invested at a steady 12% annual return from age 54 to 67, that stream lands near $1 million. Invested at 8%, a more conservative assumption after fees and sequence risk, the same contributions land closer to $300,000 to $400,000. Same effort, very different retirement.”"

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