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As Americans are barely getting by due to inflation, tariffs, and a cost-of-living crisis, saving for retirement can feel like the priority lowest on the totem pole.\u00a0<\/p>\n
But multimillionaire serial investor and entrepreneur Kevin O\u2019Leary says saving is more important than ever before.\u00a0<\/p>\n
\u201cWhat piece of advice do I give my kids over and over and over again about money?\u201d the Shark Tank <\/em>star questioned in an Instagram video earlier this year. \u201cDon\u2019t spend it. Save it. Invest it. Let it compound. That\u2019s the gift the market gives you.\u201d<\/p>\n O\u2019Leary\u2019s golden rule of investing is straightforward. He says to take 15% of every dollar you earn, whether it\u2019s from your paychecks, side hustles, or birthday money from grandma, and put it directly into the market.<\/p>\n \u201cJust let it compound,\u201d he said.\u00a0<\/p>\n \n For the average American worker who makes $68,000 per year, that simple rule will pay off in the end, he argued.<\/p>\n \u201cIf you make $68,000 a year, the average salary, and you do this your entire life, just 15% of your paycheck, you\u2019ll end up a millionaire at retirement at 65,\u201d O\u2019Leary said.<\/p>\n Most national estimates place the average American salary at roughly $66,000 to $69,000 per year. Assuming O\u2019Leary\u2019s estimate of $68,000, the numbers would break down as follows.\u00a0<\/p>\n Assuming O\u2019Leary\u2019s 15% rule, an American making $68,000 per year would save about $10,200 per year, or $850 per month. Invested consistently over a 40-year career, say from age 25 to 65, and assuming the S&P 500\u2019s historical average return of roughly 10%, that $850 monthly contribution would grow to approximately $5.3 million by retirement.<\/p>\n Even using a more conservative average return of 7% would still put the average American in millionaire status, with a final portfolio worth around $2.2 million.<\/p>\n While the math works on paper, it\u2019s becoming more unrealistic for average Americans to save that much money each month.\u00a0<\/p>\n For workers in the $50,000\u2013$79,999 income bracket,\u00a055% report feeling behind on retirement savings, and this group is among the most likely to lack adequate preparation. The overall personal saving rate as of mid-2025 sits at just\u00a04.4% of disposable income, according to the Bureau of Labor Statistics, meaning someone earning $68,000 saves roughly\u00a0$3,000 per year\u00a0toward retirement, on average. Among 401(k) participants specifically, Vanguard data show<\/span> the median total contribution rate (employee plus employer) is about\u00a011.5%, though this applies primarily to those with<\/span>\u00a0401(k) access.<\/p>\n For a household earning $68,000 before taxes, take-home pay is about $52,000 to $54,000 after federal and state taxes, leaving just $3,600 per month for other expenses.\u00a0<\/p>\n According to RentCafe, the average rent in the U.S. is $1,740 per month, leaving just about $1,860. Then tack on groceries, which Bureau of Labor Statistics data shows can be as high as $400 per month for a single person. (Now we\u2019re down to about $1,460.)\u00a0<\/p>\n Then there\u2019s student loan payments (averaging $434 per month) and utilities (about $300 per month). That only leaves $726\u2014not enough to meet the 15% of earnings saved that O\u2019Leary suggested.\u00a0<\/p>\n Even if we assume 15% of the average American\u2019s take-home pay of about $52,000, that means they\u2019d have to invest $650 per month (still making them a millionaire by age 65), but that leaves just $150 per month in discretionary pay.<\/p>\n O\u2019Leary argues, though, that younger generations need to stop spending on unnecessary items.<\/p>\n \u201cThe best piece of advice I can give anybody: Don\u2019t buy stuff you don\u2019t need,\u201d he insisted. \u201cInvest it instead.\u201d<\/p>\n O\u2019Leary\u2019s advice largely mirrors the advice of index fund investing long shared by Warren Buffett, who has repeatedly said the average investor is best served by putting money in a low-cost S&P 500 index fund and leaving it alone.\u00a0<\/p>\n \u201cPut 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard\u2019s),\u201d Buffett wrote in a 2013 shareholders\u2019 letter. \u201cI believe the trust\u2019s long-term results from this policy will be superior to those attained by most investors\u2014whether pension funds, institutions, or individuals\u2014who employ high-fee managers.\u201d<\/p>\n Suze Orman, financial advisor, author, and podcast host, has also said Americans need to prioritize saving or investing at least 10% of their earnings each year\u2014particularly given longer life expectancies and rising health care costs in retirement. She\u2019s even argued that 70 should be the new retirement age because Americans aren\u2019t financially prepared enough.<\/p>\n \u201cYou likely have plenty saved up to breeze through 15 years or so of retirement. But, people, if you stop working in your sixties, your retirement stash might need to support you for 30 years, not 15,\u201d she wrote in 2017.<\/p>\n A version of this story was originally published on Fortune.com on March 31, 2026.<\/em><\/p>\n<\/div>\nDoes Kevin O\u2019Leary\u2019s math check out?<\/h2>\n
What other investors say\u00a0<\/h2>\n