Have $100,000? Here Are 5 Ways to Grow That Money Into $1 Million for Retirement Savings

Are you aiming to amass $1 million for retirement? That's a great goal -- though some would have you question whether that will be enough. Whether you have $100,000 right now or you're starting from scratch, and whether you're aiming for $1 million or $2 million or more, there are lots of smart strategies to employ.

Here are five approaches to investing that can help you reach your retirement goals. See which ones make the most sense for you and then aim to act on some or all of them.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

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1. Buy the haystack

It's hard to beat the stock market when it comes to building long-term wealth. Consider these average annual returns, from Wharton Business School professor Jeremy Siegel:

Data source: Stocks for the Long Run, Jeremy Siegel.

The supremacy of stocks holds true over shorter periods, too. For example, according to Siegel, during the 75 years between 1946 and 2021, stocks returned an annual average of 11.3%, compared to 5.8% for long-term government bonds. The lesson here is that stocks outperform bonds over most long periods.

That 11% return isn't guaranteed, so the table below shows how your money might grow at 8% annually:

Calculations by author.

So how should you invest in stocks? Well, consider not trying to become a stock market genius, picking tomorrow's big winners today. Instead of trying to find those needles in a haystack, you might just invest in the entire haystack, to paraphrase Vanguard Group founder John Bogle. A broad-market index fund is great for that -- and even Warren Buffett approves. Here are few exchange-traded funds (ETFs) worth considering:

• Vanguard S&P 500 ETF (NYSEMKT: VOO)
• Vanguard Total Stock Market ETF (NYSEMKT: VTI)
• Vanguard Total World Stock ETF (NYSEMKT: VT)

2. Consider the power of dividends

Another smart move is including healthy and growing dividend-paying stocks in your portfolio. They offer fairly dependable regular income, plus likely stock price appreciation over time, plus likely dividend increases over time. It's a win-win-win!

Dividend payers are no slouches, either. Check out the numbers below, adapted from a Hartford Funds report:

Data source: Ned Davis Research and Hartford Funds.

Again, you don't have to hunt for the best dividend payers. Instead, the following solid ETFs can quickly have you invested in lots of good dividend payers:

• Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD)
• iShares Core Dividend Growth ETF (NYSEMKT: DGRO)
• Vanguard Dividend Appreciation ETF (NYSEMKT: VIG)

3. Reinvest your dividends

Here's a practice that can turbocharge your investing: Reinvest your dividends! Sure, if you're already retired, you might just use your dividend income for your living expenses. But if you're still working, saving, and investing, let your dividend income accumulate in your investment accounts and then plow it into more shares of your most promising stocks or funds.

Better still, some good brokerages will automatically reinvest your dividends for you.

4. Spice things up with some growth stocks

It's fair to wish for above-average returns instead of average returns. If that appeals to you, you might devote a portion of your portfolio to growth stocks. Growth stocks are tied to companies growing at a faster-than-average rate, such as: Nvidia, MercadoLibre, Amazon, The Trade Desk, Intuitive Surgical, and Salesforce.

Of course, growth stocks can be volatile, and some of them will flame out, do it's good to protect yourself by spreading your dollars across a bunch of them. The Motley Fool's investing philosophy suggests buying into about 25 or more companies and aiming to hang on to your shares for at least five years.

You can make it even easier on yourself, again, by investing in one or more high-powered ETFs. A few to consider are:

• iShares Semiconductor ETF (NASDAQ: SOXX)
• Vanguard Information Technology ETF (NYSEMKT: VGT)
• Vanguard Growth ETF (NYSEMKT: VUG)
• Vanguard S&P 500 Growth ETF (NYSEMKT: VOOG)

5. Be diligent and patient

This strategy is the most important of all: You'll need to be patient and diligent. You'll need to keep investing for many years -- no matter whether the stock market is soaring or slipping. You'll have to not get disillusioned. (If you feel yourself losing interest or hope, find some good books on investing -- they can remind you of what's possible, and of how your money can grow like gangbusters.)

However you go about it, be sure you've got a solid retirement plan and that you're executing it.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Selena Maranjian has positions in Amazon, Intuitive Surgical, MercadoLibre, Nvidia, Salesforce, Schwab U.S. Dividend Equity ETF, The Trade Desk, Vanguard Index Funds - Vanguard Growth ETF, and iShares Trust - iShares Semiconductor ETF. The Motley Fool has positions in and recommends Amazon, Intuitive Surgical, MercadoLibre, Nvidia, Salesforce, The Trade Desk, Vanguard Dividend Appreciation ETF, Vanguard Index Funds - Vanguard Growth ETF, Vanguard S&P 500 ETF, Vanguard Total Stock Market ETF, and iShares Trust - iShares Semiconductor ETF. The Motley Fool has a disclosure policy.