You may have ambitious retirement goals, such as seeing the world. Alternatively, your objectives might be more modest: you just want the choice to live in a pleasant house and pursue hobbies.

Even if your retirement plans are modest, a sufficient financial reserve may make them feasible. And the good news is that you do not need to invest hundreds of thousands of dollars into your 401(k) or IRA to get there. These three actions, in fact, might raise $100,000 in contributions to $1 million by the time you reach senior years.

1. Buy dividend stocks

Dividend paying equities offer two ways to earn money. The first is share price appreciation, which occurs when a company’s stock value increases. Your stocks’ value may increase over time, leaving you with more wealth to spend.

Second, your dividend payments from those stocks represent money that you may and should re-invest from year to year. This will help you grow even more money – without requiring you to do anything (especially true if you have your dividends reinvested automatically).

2. Buy index funds

Passive funds that attempt to match the performance of several benchmarks are known as index funds. While they won’t help you outpace the market, they may help you produce some solid returns in your IRA or 401(k) if properly invested.

Another advantage of index funds? They eliminate the guesswork from investing. If you’re not a seasoned investor, you don’t have to worry. Indexes allow you to invest in a large number of stocks without having to conduct extensive research. Diversification is also an important element in the path toward financial independence.

3. Invest in real estate

It’s also a good idea to branch out in your portfolio. And real estate may be the way to do it.

You can’t put your IRA into an income property (you can buy one separately, but that implies you have the funds and desire for risk). However, you may invest in REITs or real estate investment trusts.

This is the most common type of real estate investment trust. REITs are businesses that own a variety of properties and make money from renters. One of the greatest features about REITs is that they must pay out at least 90 percent of their taxable income as dividends to shareholders. As a result, those distributions are often lavish.

REIT shares can also appreciate in value over time, especially if you invest in growth-oriented sectors. And it might leave you exceptionally wealthy over a longer investment period.

Get ready to enjoy your dream retirement

You may want to retire with $1 million or more. However, that does not imply you must contribute $1 million to your retirement account. All you have to do is make wise investment selections and keep your money invested for multiple decades. If you stick to that strategy, you might be shocked by the amount of money you wind up having.

Author: Blake Ambrose

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