Secure Your Millionaire Retirement: Discover Your Monthly Investment Plan

Do you want to be a millionaire in retirement? 🤑 Discover strategies for financial independence, from saving smartly in your twenties to investing wisely in your forties.

Key Takeaways

  • Learn why Germans save more but are poorer compared to other nationalities and how to secure your financial future
  • Understand relevant factors such as age, salary, and net worth’s crucial role in financial planning
  • Discover the 4% rule and its implications for achieving financial independence: FIRE (Financial Independence, Retire Early)
  • People below 25: Maximize savings potential early to reach millionaire status by retirement age
  • Age 25 – 29: Leverage compounding interest and invest wisely to secure a prosperous future
  • Age 30 – 34: Overcome challenges by increasing savings and exploring investment options for financial stability
  • Age 35 – 39: Despite life changes, focus on saving and investing to meet your millionaire retirement goals
  • Age 40 – 44: Adjust strategies to meet higher financial targets and maintain retirement aspirations
  • Age above 45: Address challenges and explore alternative strategies for achieving financial independence before retirement
  • How to invest right before retirement: Mitigate risks and safeguard investments as retirement approaches
  • Tips to catch up with savings: Enhance returns, start early, and automate savings for financial success
  • Secure your financial future by understanding key factors and implementing strategic financial planning at every stage


Germany boasts an impressive average savings rate of 11.1%, surpassing other nations like Austria, Japan, the US, and Italy. However, despite this robust saving culture, Germans often lag behind in wealth compared to their counterparts in other countries. This dissonance raises the question: How can a nation with such high savings rates still struggle financially?

In this exploration, we’ll uncover the factors contributing to Germany’s financial landscape and provide actionable insights to help you achieve your financial aspirations. Regardless of your age, our goal is to equip you with the knowledge needed to outperform the average German saver and work towards fulfilling your financial objectives. Let’s embark on this journey together to secure a prosperous future and retire with confidence.

Relevant Factors to secure your millionaire retirement

To assess your current financial standing and chart a path towards your desired future, three crucial factors come into play:

  1. Your Age: Firstly, your age plays a pivotal role, with compounding interest serving as a key component. The earlier you commence investing, the greater the potential for exponential wealth growth. Leveraging compounding interest effectively can significantly bolster your financial success. Conversely, neglecting this principle can hinder your progress, leading to missed opportunities for wealth accumulation.
  2. Salary (monthly): Secondly, your salary holds significance as it directly influences your capacity to save and invest. Higher earnings afford greater opportunities for savings and investment, accelerating your journey towards financial security. Notably, income disparities exist, with the top earners boasting more robust savings rates compared to those in lower income brackets.
  3. Net Worth: Lastly, understanding your current net worth provides a baseline for financial assessment. By assessing your assets and liabilities, you gain insight into your overall financial health. A higher net worth signifies a stronger financial position, while a negative net worth indicates financial liabilities outweigh assets.

This evaluation serves as a crucial starting point for devising tailored financial strategies to achieve your goals.

How does the Fire rule work?

The Financial Independence, Retire Early (FIRE) movement has gained significant traction in recent years, with more individuals seeking to achieve financial independence and retire at a younger age. Many are drawn to the idea of breaking free from the traditional nine-to-five grind and gaining control over their time and resources. However, the question arises: how feasible is this goal for the average person?

A common method used to calculate one’s FIRE number—the amount needed to achieve financial independence—is the 4% rule. According to this rule, if you withdraw 4% of your investment portfolio annually, you have a low risk of running out of money over a 30-year retirement period. By multiplying your annual spending by 25, you can determine your personal FIRE number.

While the 4% rule provides a straightforward calculation, it has its limitations and risks. It does not consider factors such as taxes, healthcare expenses, and other financial obligations, potentially leading to an underestimation of retirement needs. To address this, some financial experts advocate for a more conservative approach, using 4% of gross income rather than portfolio value to calculate the FIRE number.

Investing for people below 25

For individuals below the age of 25, the financial landscape may seem promising, with an average monthly salary of €2,680, translating to approximately €1,869 in net income. While this might appear substantial, it’s essential to consider the context: many young Germans start apprenticeships (Ausbildung) at 16, paving their way into careers by their early 20s. However, the trend is shifting, with fewer opting for apprenticeships and more pursuing higher education.

Despite these changes, young individuals below 25 have an average of €6,500 in assets—a notable figure compared to counterparts in the US burdened by an average student loan debt of $30,000. By investing €6,500 and saving 11.1% of net income, as discussed earlier, these individuals could accumulate nearly €900,000 by retirement at age 67, assuming a 7% rate of return. So, a millionaire retirement is almost possible.

Adhering to the 50/30/20 rule—allocating 50% of income to needs, 30% to wants, and saving/investing the remaining 20%—could accelerate wealth accumulation. With a net income of around €1,800, following this rule would entail saving €374 monthly, potentially reaching close to €1.5 million with a 7% return. These figures underscore the significant potential for financial growth and security, making early investments and disciplined saving habits paramount for young individuals below 25.

Investing for people aged between 25 - 29

Entering the late 20s often marks a period of substantial income growth. On average, individuals in this age group in Germany earn a gross salary of €3,344, translating to around €2,244 in net income. This phase, extending until one’s 40s, typically witnesses significant career advancement and income escalation, as reflected in the increased net worth, which more than doubles to €16,500.

If a person in this age bracket were to invest their net worth of €16,500 with a 7% rate of return and continue adding 11.1% of their income, they could accumulate slightly over €866,000 by retirement at 67. Therefore, a millionaire retirement is still reachable. Despite investing 20% more than their younger counterparts, the impact of compounding interest becomes evident—the older individual would have over €100,000 less in capital gains than the younger investor. This highlights the critical importance of starting investments early to leverage the power of compounding interest effectively.

To achieve financial independence and retire early (FIRE) by age 60, this person would need to allocate over 25% of their income towards investments, considering their FIRE number is slightly over €1.1 million. These insights underscore the significance of strategic financial planning and early investment decisions for individuals in their late 20s.

Investing for people aged between Age 30 - 34

Entering your 30s often brings a surge in income, with an average gross salary of €3,844 in Germany (€2,518 net). Consequently, your net worth should almost double again, reaching around €35,000. However, this increase doesn’t necessarily translate to improved financial prospects.

Analyzing savings rates reveals a concerning trend. Despite an average increase in net income of almost €300, individuals in this age group only invest around €30 more, indicating a potential shortfall in savings optimization. To bridge this gap, consider allocating 50% of any income increases towards investments, while using the remaining portion for personal enjoyment and lifestyle enhancements.

While the disparity in savings rates between an 11.1% and a 20% savings rate may not seem substantial initially, the resulting difference in accumulated wealth can be significant, amounting to €120,000. As the gap widens, the feasibility of achieving FIRE (Financial Independence, Retire Early) becomes less attainable, especially considering the need to save over 36% of your income to reach your FIRE number.

This underscores the critical importance of leveraging the power of compounding interest and adopting prudent savings strategies early on to ensure long-term financial security.

Investing for people aged between Age 35 - 39

As you enter your late 30s, your average gross income likely surpasses €4,000 for the first time, accompanied by a nearly doubled net worth of €64,500. Over the past decade or so, your life has likely undergone significant personal and financial changes, such as starting a family, buying a house, or generating passive income. However, these shifts may not be fully reflected in official salary figures.

Despite these life changes, the disparity between savings rates of 11.1% and 20% remains relatively unchanged from earlier years. While it’s understood that higher investments yield lesser disposable income, the goal of achieving millionaire status through a 20% savings rate is still feasible.

What’s crucial at this stage is understanding your FIRE number, particularly as many individuals begin contemplating retirement in their late 30s. As you explore millionaire retirement options online, you may stumble upon the FIRE community and envision an early retirement fueled by financial independence. However, achieving this dream requires diligent saving, with a FIRE number hovering around €1.24 million, necessitating monthly savings of nearly €1,400—equivalent to over 50% of your net income.

Although challenging, reaching this ambitious goal is not impossible with discipline and determination. It requires stringent budgeting and prioritizing long-term financial security over short-term indulgences. Yet, where there’s a will, there’s a way, and with careful planning and commitment, early retirement can indeed become a reality.

Investing for people aged between Age 40 - 44

As you approach your late 40s, your income may continue to rise but eventually starts to plateau, mirroring the stagnation in your net worth. Despite this, savings rates significantly increase, leading to a considerable decrease in the outcome. The FIRE number at this stage, approximately €1.3 million, seems daunting, especially when considering that saving 85% of your net income is virtually impossible for most individuals.

If you find yourself in your early 40s with aspirations of achieving financial independence and early retirement, it’s essential to pay attention to the strategies outlined in this article. In the face of this formidable challenge, it’s crucial to explore various methods to catch up on your savings or accelerate your progress towards FIRE. Whether you’re lagging or seeking to expedite your journey to financial freedom, the insights and tips provided in this article can offer invaluable guidance. 

Investing for people aged above 45

As you enter your late 40s, the reality of achieving financial independence can become increasingly daunting. Saving enough to meet the FIRE (Financial Independence, Retire Early) goals may seem like an insurmountable challenge, especially when compared to the earlier decades of your career. In your 50s, the significance of savings becomes more apparent. The difference in outcomes between someone in their late 50s and someone in their early 20s or 30s can be staggering. While the young investor may see their savings grow exponentially, the late 50s investor may struggle to double their money before retirement.

At this stage, the FIRE number, representing the amount needed for financial independence, may seem out of reach for many. It’s a point where the prospect of relying on a large inheritance or resorting to drastic measures like faking one’s own death for life insurance payouts starts to seem more plausible (sarcasm), albeit highly undesirable.

Entering your early 60s, income fluctuations may occur, possibly due to early retirement or transitioning to part-time work. However, there’s a level of uncertainty regarding these shifts, making financial planning even more challenging as retirement approaches. Nonetheless, despite these challenges, there are strategies and tips available to help individuals in this age group catch up on their savings and work towards financial security even if there might be no millionaire retirement possible anymore.

How to invest right before retirement

As retirement approaches, it’s crucial to reassess your investment strategy to minimize risks and protect your savings. While traditionally, the stock market may have been a significant component of your investment portfolio, it’s prudent to consider reducing exposure to equities as you near retirement age. This precautionary measure aims to safeguard your funds against sudden market downturns, such as the COVID-19 crash of 2020.

As a licensed financial adviser, we must emphasize that it’s never too late to adjust your investment approach. Therefore, we can share a personal tip based on experience. A few years before you intend to begin withdrawing your savings for retirement, consider transitioning to more conservative investment options. This may involve reallocating your assets into safer vehicles, such as bonds or cash equivalents, which offer more stability and reduced volatility compared to stocks.

By adopting a more conservative investment strategy, you can mitigate the risk of significant losses during periods of market instability. This proactive approach can help safeguard your retirement nest egg, ensuring that you’re better positioned to enjoy a financially secure and stress-free millionaire retirement. Remember, it’s essential to consult with a qualified financial professional to tailor an investment strategy that aligns with your individual goals, risk tolerance, and retirement timeline.

3 Tipps to catch up with savings to secure your millionaire retirement

If you’re looking to catch up with your savings or surpass the average numbers, We’ve got three valuable tips for you.

  1. Firstly, consider aiming for a 7% return on your investments, which aligns with the average stock market return adjusted for inflation. Increasing your return doesn’t mean taking on excessive risks; instead, explore options like investing in a base pension. With tax deductions of up to 42%, you can reinvest these savings to boost your returns. Alternatively, leverage opportunities like purchasing rental properties, which can offer substantial returns exceeding 20% per year on equity.
  2. Secondly, prioritize the power of compounding interest by starting your investment journey as early as possible. Compounding interest can significantly amplify your savings over time, making it essential to begin investing sooner rather than later. If you’re unsure about where to start or how to optimize your investments, don’t hesitate to seek professional guidance.
  3. Lastly, streamline your financial management by automating your savings, investments, and retirement contributions. By automating these processes, you ensure consistency and discipline in your financial habits. Remember the wise words of the greatest investor Warren Buffet in history: “Do not save what is left after spending, but spend what is left after saving.” Embrace a proactive approach to savings to achieve your financial goals efficiently and effectively.


In conclusion, achieving financial independence and securing a comfortable retirement requires careful planning, disciplined saving, and strategic investing. Regardless of your age, it’s never too late to take control of your financial future. By understanding the principles of compounding interest, adhering to prudent investment strategies, and making informed decisions about your savings, you can pave the way toward a prosperous retirement.

While the journey may present challenges, the key lies in persistence and adaptation. Whether you’re in your twenties, forties, or beyond, there are steps you can take to bolster your financial security and work towards your retirement goals. Remember, every contribution, no matter how small, adds up over time. By implementing the tips and strategies discussed, you can set yourself on the path to financial freedom and enjoy the peace of mind that comes with knowing you’re prepared for the future. Start today, and let your commitment to financial well-being shape a brighter tomorrow. If you need help with setting up the right savings strategy for your retirement, feel free to book a meeting with us.

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