How one couple saved $1 million for retirement

Donna and Dave Miller photo

A number of smart saving moves over the years allowed Donna and Dave Miller to retire with more than $1 million in the bank.

It’s true that not everyone has the same advantages as the Millers, like Dave’s pension from the U.S. Air Force. But everyone can learn from at least one of this couple’s smart moves.

Smart move 1. Start saving early.

Dave, 73, admits that he has always been a saver. By the time he married Donna, 71, in 1964, he already had $5,000 in the bank.

Neither came from a wealthy family — both grew up on small family farms — so besides their savings account and a car Dave had already paid for, the Millers started from scratch.

"We established a savings program from the start, usually in mutual funds," he says. "Not much, but some each month."

Smart move 2. Be a team.

Working together as a team enabled the Millers to always live within their means.

"Our success is due as much to my wife's support and participation as anything that I did," Dave says. "It was a team effort."

When money was tight in the early years of their marriage, the Millers were careful about what they spent their money on.

"We kept a fairly detailed budget that we worked on together, keeping track of any money we spent over a dollar or so," he says.

They also documented what they actually spent, so they were able to correct any mistakes in future budgets and track expenditures they hadn’t allotted for.

As the years went on, and they had more money, the Millers relaxed their budget a bit, first paying their mortgage and utilities, and depositing money into savings, and then basing what they spent on food, clothing and entertainment on what was left over.

How to become a millionaire by 65

Age Currently invested Monthly savings needed
30 $0 $450
35 $25,000 $500
40 $100,000 $350
45 $125,000 $700
50 $300,000 $200
55 $350,000 $1,200
This assumes an annual 8% rate of return. Our millionaire calculator can help determine how much you'll need to save to reach $1 million based on your age and current savings.

Smart move 3. Only buy as much house as you can afford.

The Millers spent the first three years of their marriage living in a mobile home because it was cheaper.

During the remainder of his 20 years in the Air Force, his family never lived on base while stationed stateside. Instead, the Millers always bought a home they could afford, then sold it for a profit of a few thousand dollars when he was transferred to another base.

In 1974, the Millers took a different approach. They bought a house in Highland, Calif., and rather than sell it later, they began renting it out in 1978.

The Millers now live in the Air Force Village West retirement community in nearby Riverside — and they continue to earn rental income on the Highland property.

Since the mortgage is paid off, they just pay insurance, taxes and maintenance, which are more than covered by the $1,100 a month they receive in rent.

Smart move 4. Don’t waste money on cars.

Miller estimates that he and his wife have owned fewer than 10 vehicles in the 45 years they’ve been married. And they still have three of those cars.

Unless a car was totaled in an accident, they drove them until they stopped running.

Also, they purchased eight of those cars used.

"A car one to two years old is just as dependable as a new one, looks like a new one and, after six months, who knows or cares whether you got it new or used?" Dave says.

Plus, Dave notes, buying used enabled them to buy a car outright and not stretch their budget by adding a monthly car payment.

Smart move 5. Don’t retire early.

Even though Miller put in 20 years with the Air Force, retired from military service in 1981 and began receiving a military pension of approximately $1,800 a month, he didn’t call it a day.

Instead, he took a second job as a missile safety engineer with a civilian company, using his skills and advanced engineering education from the military.

Miller worked at this second career for 18 years, at which time he took a lump-sum payout of about $300,000. He had smartly put 13% of his monthly pay into his 401(k) account and received a 3% match from his company.

Smart move 6. Wait to draw Social Security benefits.

Although he could’ve received benefits at age 62, Miller waited until he was 65 and 8 months, which the U.S. government considered his full retirement age. This allowed him to access 100% of his Social Security benefits.

Miller admits that this is where he and his wife made one major mistake, which still costs them about $250 a month.

"We did not realize it at the time, but Social Security also sent Donna her allowable Social Security at the same time, but with an early-drawing penalty since she was 63 at the time and not eligible for full Social Security," he says.

Had they realized this error, they would’ve delayed her payments until her full retirement age.

Smart move 7. Know when to call in professionals.

Miller handled his own investments for years, investing primarily in mutual funds and using advice from financial magazines.

In 2004, he turned those investments over to a financial planner. That year, he and his wife withdrew $225,000 from their investments and bought lifetime annuities from USAA Federal Savings Bank, a bank that mainly serves the military and their families. The annuities will provide the couple about $2,000 a month for the rest of their lives.

"We currently have an after-tax monthly income of $6,800 a month, which more than covers our monthly living expenses," Miller says.

The breakdown: military pension, 33%; annuities, 29%; Social Security benefits, 23%; rental income, 16%.

The Millers only tap into their investment portfolio for European travel and special occasions, like a family trip to Hawaii last Christmas for them, their four children and eight grandchildren.

Start working toward a million dollars yourself by using our millionaire calculator, which shows you how long it will take you to save $1 million based on your age and how much you set aside each month.

  • Shirley

    Thanks for the comments..Helped put things in perspective.

  • Dennis Byczynski

    The Milles did almost everything quetion, how many children did the Millers raise and did they send them all through college. ?


  • Todd

    As a self employed idividual with no pension or 401k, how much money do I need to save to retire? What is the magic number?

  • kathleen

    The article says they have 4 children and 8 grandchildren.

  • joe

    Where do you get 8% on your money. What a foolish article

  • Harold Crowell

    Missed the most obvious: Buy shares of the safest-dividend growing stocks to hold for life. Dividends grow at a double-digit rate, far ahead of inflation.

  • Steve

    What a crock this story is! I totally agree with "Joe" on his observation questioning an 8% return on an annuity - and from a "bank" at that?! Given that the above is totally BOGUS, I have no faith in any part of this article. Whoever wrote this article is either 1). a liar or 2). thinks that people are totally stupid and gullible. You can take this article and shove it where it belongs!

    • Mike Cetera

      Steve: This annual rate of return assumption is not out of line. From the millionaire calculator: "From January 1970 to December 2010, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.05% (source:"

  • David

    Don't forget to buy real estate early and buy when interest rates are low. Pay extra towards the principal to pay off early.

  • Gene L

    They missed a major expense, children's college education. My wife and I started UGMAs before 529's existed. Then opened 529s. Dghtr #1 graduated from UNC (out of state!) with $500 left of a $120k investment, Dghtr #2 a Jr at USCarolina with $30k left. What a relief for us to not worry how the next Gen will get their start in this OBAMAconomy.

  • griffer

    One thing they had going for them that a lot of people don't is his military pension. If my calculations are correct it earned him almost $670,000 since 1981, a nice chunk of change.