Real life provides us with literally millions of individual financial scenarios, making it hard to dish out blanket investment advice.

But if you’re in your early or mid 20s, you have a golden opportunity, and I’m going to point out four ways you can turn that opportunity from gold to platinum — and maybe even to titanium.

Your golden opportunity is this: You have decades ahead of you before you (presumably) will retire; and (again presumably) you have still more decades while you’re retired.

Of course, this opportunity is valid only if you take advantage of it. As the fine print might say, “Must be present to win.” In this case, “being present” means saving money and investing it wisely for the long term.

To show you how to go from gold to platinum, I need numbers. So here’s a base scenario:

Let’s assume you’re 24 years old and hope to retire at 65. You have a decent job and can set aside $500 a month toward your retirement. Ideally, you get some help, in the form of matched contributions, from your employer. But however you do it, I’ll assume you can add $6,000 a year to your long-term savings.

I also assume you will earn an average return of 8% on that money until you retire at age 65; then you’ll dial back your level of risk, and earn 6% annually for another 30 years of retirement. (The 8% is a reasonable return to expect over time from a target-date retirement fund.)

**Read: **How bad could it (realistically) get for your 401(k)?

Accordingly, in this starting scenario, you save a total of $240,000 ($6,000 a year for 40 years), earning 8% a year.

At age 65, you start your retirement with about $1.68 million, and over the next 30 years you can expect to have $2.62 million available to withdraw, assuming you take out 4% of your portfolio each year and leave the rest to grow at 6%.

After 30 years, your portfolio is worth $2.83 million. Add that to the money you took out in retirement, and your $240,000 outlay provided you and your heirs with a total of $5.46 million.

Here’s a simple table to recap the numbers:

**Table 1**

Results for 8% return for 40 years, 6% for 30 more*

Annual contribution

$6,000

Total contributions

$240,000

Portfolio at age 65

$1,678,686

Total retirement withdrawals

$2,623,973

Portfolio at age 95

$2,833,234

Total lifetime payoff

$5,457,207

*Assumes annual withdrawals equal to 4% of portfolio value each year from age 65 to 95.

If that’s gold, then what would qualify as platinum? How about $1.5 million more on that bottom line? You might be surprised at how easy that could be to achieve.

You can get there by increasing your annual compound returns by only 0.5%, so you earn 8.5% before retirement and 6.5% after you retire.

**Read: **What to do with your cash if you’re retired or retiring soon

Start by ditching the target-date retirement fund, which probably has about 10% of your money in relatively low-paying bond funds. For the first 15 to 20 years of this scenario, maintaining an all-equity portfolio in the S&P 500

SPX,

+0.16%

(using an index fund) will probably get you at least halfway to that extra 0.5%.

Go the rest of the distance, and probably beyond, by diversifying into asset classes with long histories of outperforming the S&P 500.

If you do those two things, I think it’s a slam dunk to get at least the results shown in Table 2.

**Table 2**

Results of 8.5% return for 40 years, 6.5% for 30 more*

Change from Table 1

Annual contribution

$6,000

No change

Total contributions

$240,000

No change

Portfolio at age 65

$1,924,893

Up 14.7%

Total retirement withdrawals

$3,243,727

Up 23.6%

Portfolio at age 95

$3,741,381

Up 32.1%

Total lifetime payoff

$6,985,108

Up 28.0%

*Assumes annual withdrawals equal to 4% of portfolio value each year from age 65 to 95.

It’s very possible that the two steps I just outlined, especially diversifying beyond the S&P 500, would be enough to boost your return by a full percentage point, not just a half.

That would give you $2.21 million at age 65, total withdrawals of $4.02 million and a portfolio at age 95 equal to $4.94 million.

That certainly should qualify as platinum. Beyond that, there’s another level I sometimes think of as titanium, at which you earn 9% a year while you’re working and 7% during 30 years of retirement.

That requires just one important additional step: Each year while you’re accumulating money, you increase your contribution by 3%. So in the second year, you add $6,180; the next year you add $6,365, and so forth.

That won’t always be easy, but for many people it is quite possible.

There are big payoffs for this. Take a look at the summary in Table 3.

**Table 3**

Results of 9% return for 40 years, 7% for 30 more, with annual contributions starting at $6,000, increasing 3% annually *

Change from Table 1

Total contributions

$452,408

Up 22.6%

Portfolio at age 65

$3,068,065

Up 82.7%

Total retirement withdrawals

$5,580,807

Up 112.6%

Portfolio at age 95

$6,863,013

Up 142.2%

Total lifetime payoff

$12,443,820

Up 128%

*Assumes annual withdrawals equal to 4% of portfolio value each year from age 65 to 95.

There, my friends, is what could be called the titanium standard. And it’s potentially even better than it might seem.

Having nearly doubled the size of your portfolio at age 65, you most likely could increase your annual withdrawals to 5% without much concern for running out of money or leaving your heirs high and dry.

If you take that step, you’ve probably reached a level that could be called “titanium-plus.”

My point is not to dazzle you with big numbers so much as to show the very large impact of relatively small changes that are within your control, especially if you have the golden opportunity of many years ahead.

It’s never too late to improve your investment performance and reap some rewards. And there are many more ways to do that, as I discuss in my latest podcast: “30 ways to make another million—Really.”

*Richard Buck contributed to this article.*

*Paul Merriman and Richard Buck are the authors of ***We’re Talking Millions! 12 Simple Ways to Supercharge Your R***etirement. **Get your free cop**y.*

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