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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years Trusted by A high income certainly helps you retire a millionaire<\/a> \u2014 but you also need strategy.\u00a0<\/p>\n As family attorney Julia Rueschemeyer<\/a> transitions into retirement as a millionaire<\/a>, she credits three reasons for her plush nest egg. And while they required plenty of money invested, they didn\u2019t require much in the way of fees.\u00a0<\/p>\n Cash Balance Plan<\/p>\n Rueschemeyer spent a decade as a sole practitioner, which opened the door to a retirement account type not available to most Americans.\u00a0<\/p>\n \u201cAs a solopreneur, I could use a cash balance plan, which allows self-employed people to save hundreds of thousands of dollars every year pre-tax,\u201d she explained. \u201cIf you work for a paycheck<\/a>, you are likely limited to just $8,000 a year in an IRA.\u201d\u00a0<\/p>\n<\/p>\n These technically work as a defined benefit plan, but because you set it up for yourself, it works more like a defined contribution plan (see details from the Department of Labor<\/a>). Setting up and managing cash balance plans can get complicated quickly and costs money. <\/p>\n \u201cMany [certified public accountants] CPAs can administer these plans for $2,000 [to] $3,000 a year,\u201d Rueschemeyer added.<\/p>\n That\u2019s the cost of contributing up to hundreds of thousands in a pre-tax account each year.\u00a0<\/p>\n A 100% Equities Portfolio<\/p>\n Yes, administering a cash balance plan costs money. But inside that account, Rueschemeyer keeps it simple with low-cost index funds<\/a> \u2014 and no bonds.\u00a0<\/p>\n \u201cI do not own a bond: 100% of my retirement investments are in low-cost index funds,\u201d she stated. \u201cIf you are investing for the long term (minimum 10 years), stocks are likely to give you much more money in retirement. And if you have other sources of retirement income, you can easily weather a few years of market downturns.\u201d<\/p>\n Rental Properties<\/p>\n That \u201cother\u201d source of income that Rueschemeyer alluded to? For her, that comes from rental properties.\u00a0<\/p>\n \u201cMy spouse and I began investing in rentals 20 years ago, and now own four properties including a duplex and a triplex,\u201d she said. \u201cReal estate investing<\/a> has three incredible financial advantages: Leverage (buying with other people\u2019s money), depreciation and the qualified business income deduction.\u201d\u00a0<\/p>\n<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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