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.
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.
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.
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).
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.
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.
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:
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!
CFO & former Wall Street analyst helping your reach financial independence.
Download my eBook “20 Ideas to Earn Extra Money from Home.”
Take my financial planner course to learn the secret to building wealth that they never taught you in school