How to save enough to reach financial independence or retirement in under 10 years. It may seem like a daunting task, but with some careful planning and discipline, it’s definitely achievable. Let’s get started!

I used to be a financial planner and am now a Chief Financial Officer. As I talk to people about their money, one of the themes that comes up a lot is feeling regret and anxiety for not starting sooner. 

We all have plans to start investing at an early age, but then life happens. Things come up. Family, jobs, moving, loss of a job or company, unexpected expenses. Next thing you know, you’re 40 with nothing saved.

That happened to me. When I was 17 I had a plan to become a millionaire by age 40. At 40, after a failed business, I had nothing. I married a great woman and together we turned it around and retired 8 years later. 

It’s completely possible, but takes planning and discipline. Let’s talk about the plan.

Step 1: Determine your retirement goal

The first step is to determine your retirement goal. This will help you figure out how much you need to save. You’ll need to consider factors such as the lifestyle you want to maintain in retirement, your expected expenses, and any other sources of retirement income.

Use the 25x rule and 4% withdrawal rate.

Step 2: Maximize your contributions to tax-advantaged accounts

Maximizing your contributions to tax-advantaged accounts, such as a 401(k) or IRA, is a key strategy for saving for retirement. These accounts offer tax benefits that can help your money grow faster. Make sure you’re contributing the maximum amount allowed by the IRS each year.

Step 3: Live below your means

To save enough for retirement in under 10 years, you’ll need to live below your means. This means cutting back on unnecessary expenses and living frugally. Consider downsizing your home or car, reducing your entertainment expenses, and cooking at home instead of eating out.

Most importantly keep track of expenses and where your money is going. For ideas on how to cut expenses, check out this video (point up to right).

Step 4: Increase your income

Increasing your income is another key strategy for saving for retirement in a shorter time frame. Consider taking on a side hustle or freelance work, negotiating a raise at your current job, or pursuing higher-paying career opportunities.

You can only cut so much, but there’s no limit to how much you can make. 

If you’re an employee, consider moving jobs. Forbes reports that you should move every 2 years, esp. If you’re not getting consistent raises and promotions.

Step 5: Invest aggressively

To make the most of your savings, you’ll need to invest aggressively. This means investing in stocks and other high-growth assets that have the potential for big returns. While this comes with more risk, it can also lead to bigger rewards.

Step 6: Stay disciplined and focused

Finally, it’s important to stay disciplined and focused on your goal. Stick to your budget, maintain your contributions to retirement accounts, and continue to live below your means. By staying disciplined, you’ll be able to achieve your goal of saving enough for retirement in just 5 years.

Certainly, here are a few additional tips for saving enough for retirement in 5 years:

1. Consider downsizing your living situation: If you’re currently living in a large home, downsizing to a smaller, more affordable home or apartment can free up a significant amount of money each month that can be put towards retirement savings.
2. Avoid unnecessary debt: Debt can be a huge barrier to retirement savings. Avoid taking on new debt, pay off any high-interest debt you currently have, and consider consolidating any outstanding balances to lower interest rates.
3. Take advantage of catch-up contributions: If you’re over the age of 50, you may be eligible to make catch-up contributions to your retirement accounts, which can help you save even more money in a shorter time frame.
4. Consider working longer: While the goal is to save enough for retirement in 10 years, if you’re not quite there yet, consider working a few extra years to continue saving and investing.
5. Consult a financial advisor: A financial advisor can help you create a personalized plan for saving for retirement in 10 years. They can help you understand your retirement needs, determine the best investment strategy for your goals, and provide ongoing guidance and support.
6. Consider alternatives to retirement, like working part-time, geoarbitrage where you work in a low cost country on your same salary, take a mini-retirement, sabbatical or seasonal job. I go into more detail in this video called Alternatives to Early Retirement.

There you have it, our tips for saving enough for retirement in just 10 years. While it may seem challenging, with some careful planning and discipline, it’s definitely achievable. Thank you for watching and we’ll see you in the next one!