You might think hitting a $1 million net worth means financial freedom — but according to Grant Cardone, that milestone could still leave you struggling in retirement.
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Here’s why Cardone, a private equity fund manager and real estate investor, warned that you can end up poor even with a million dollars stashed away.
$1 Million Isn’t Enough for a Long Retirement
Many people aim for $1 million as their target for their retirement nest egg — but Cardone said this is not enough.
“If their target is $1 million, then we do the math on $1 million and show them that they have the wrong target,” he told GOBankingRates while discussing the 10X Wealth Plan, a personalized financial coaching program.
“If you’re 35 and you’re like, ‘I want a million dollars by the time I’m 55,’ you just simply haven’t done the math,” Cardone continued.
If you retire at 55 with $1 million, you could easily run out of funds given the extended life expectancy. According to the Bureau of Labor Statistics, the average retiree spends roughly $4,000 a month. That means a $1 million nest egg could be depleted in just over 20 years — especially if inflation and healthcare costs rise.
“You won’t have enough [to make it to] 100,” Cardone said. “You’re back to being a poor person.”
Learn More: I’m Retiring a Multimillionaire: Here’s What I Wish I Knew in My 30s
Having a Robust Financial Plan Is Key
Instead of shooting for a random target, like $1 million, it’s better to sit down and develop a financial plan that’s personalized to you and your retirement needs.
“Financial awareness is missing in most people,” Cardone said. “Sixty-six percent of Americans have zero financial plan, and 67% of Americans are living paycheck to paycheck. Less than half of Americans are on track for any kind of retirement, and even [among those who are saving for retirement], that retirement will be insufficient.”
Build a financial plan that reflects your lifestyle, longevity and future ambitions to ensure you have enough saved for your golden years.
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This article originally appeared on GOBankingRates.com: Grant Cardone: You Can Be a Millionaire and Still Retire Poor
