Retirement Retirement Planning

Kevin O'Leary Says This 401k Strategy Can Make You a Millionaire

Learn how much you'll need to contribute to your 401(k) to become a millionaire, according to this respected investor.

By Chris Lewis, CEPF , Edited by Laura Hohenstein

Updated Oct. 18, 2026

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When it comes to saving for retirement, it can be difficult to know exactly how much you should be setting aside. But Kevin O'Leary, legendary Shark Tank investor, has built a fortune and shared his opinion on how much you should be setting aside in an interview with ABC News.

Explore his take on saving for a retirement plan and find out how to catch up if you're behind.

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Understanding the financial picture

O'Leary, sometimes known as Mr. Wonderful, joined ABC News to answer investing questions from viewers. One caller, Twyla from New York, called in to ask, "What percentage of my salary should I invest in a 401(k)?"

She wasn't sure if she could hit the recommended amount, typically 15%, with her other living expenses taken into account.

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How much Kevin O'Leary says to contribute

According to Mr. Wonderful, Americans should contribute at least 15% of their salary to their 401(k)s. Based on Twyla's current situation, he wasn't convinced that her other living expenses justified contributing less to her long-term retirement savings.

Despite her expressing uncertainty about her ability to contribute the full amount, he strongly believed that she could contribute 15% of her salary if she made certain lifestyle adjustments.

"Stop buying all that crap you don't need," he said. O'Leary believes investing for retirement should be a top priority over other discretionary living expenses.

How it could make you a millionaire

According to O'Leary, the average salary in America is $60,000. He claims that investing 15% of that amount into a 401(k) over a career could lead to a balance of $1.5 million at retirement age.

While the contributions would help you save up, the expected market returns of 6% to 8% could potentially help you grow your nest egg exponentially.

Here's the math: Let's say you earn $60,000. Investing 15% of that would be $9,000 each year. If you work for 35 years and continue to contribute $9,000 per year, you'd end up with $1.5 million in retirement savings, assuming an average market return of 8%.

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Why his advice matters

Investing for retirement is a key tenet of financial stability. But, unfortunately, many seniors are reaching retirement age without enough of a nest egg to lean on. A 2026 Senior Citizens League survey found that 44% of older Americans rely entirely on Social Security for all their income, and 75% of respondents depend on Social Security payments for at least 50% of their income.

With the average Social Security payment only a little more than $2,000, it's simply not enough for many seniors to enjoy the dignified retirement they had hoped for. With that, building up savings through a 401(k) is essential for most working Americans planning to retire someday.

Feeling behind? Here's how to catch up.

1. Cut back on discretionary spending

If you are having trouble saving for retirement, start by taking a closer look at your spending. In many cases, you'll find some discretionary spending hiding in your budget.

"You have to adjust your lifestyle to make sure you put 15% away," says O'Leary. It might involve cutting back on spending in other places, like extra items and takeout food.

2. Try to hit your employer's match

If your employer offers matching contributions, do everything in your power to at least contribute enough to get the full match.

For example, some employers offer to match your 401(k) contributions up to 3% of your salary. If you contribute 3%, and your employer matches those contributions, you've effectively seen a 100% return on your contribution from the start.

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3. Re-evaluate your biggest expenses

American households tend to spend the most in three categories: Housing, transportation, and food. Digging into your spending in those categories offers the most room for improvement.

For example, you might consider downsizing to a smaller apartment to capitalize on more affordable rent. Or if you have large car payments, you might opt to buy a more affordable vehicle to get around town without putting such a strain on your budget. These single decisions could free up significant room in your budget.

4. Look for ways to increase your income

Of course, it's easier to save and invest more money if you earn more. If possible, look for ways to increase your income. Some strategies include asking for a raise, picking up a side hustle, or taking on extra hours.

As you grow your income, intentionally direct some of it to build a robust retirement nest egg.

Bottom line

According to a recent FinanceBuzz survey, nearly two in three Americans report they are falling short of their retirement savings goals.

As you start investing for retirement, a little bit of effort can go a long way. Take the time to tweak your budget and automate your retirement contributions so you're on track for retirement.

This article is for informational purposes only and should not be considered investment advice.

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