How to Retire in 10 Years

Is retirement peeking its head around the corner, only to find you completely unprepared for it? Or, are you just hoping to retire much earlier than the average person? There are steps you can take to ensure a comfortable living within a ten year time period.

Instructions

Difficulty: Moderately Challenging

Things You’ll Need:

• Internet access
• A financial advisor

1. Produce additional cash streams that will provide you with recurring income each month, quarter, or year. For example, writing for Ehow or other freelance writing sites produces small side incomes that come in each month with very little follow up work. The point is to have more money coming in without having to give up your life for it. Work smart.
2. Begin speaking with your financial advisor about how to invest in solid stocks or funds. Understand that you will have to get a bit risky in order to hope for a quick retirement income, so ask your advisor about the safest options that have traditionally brought in the highest revenues.
3. Sell, sell, sell. If you want to get serious about saving, get rid of the junk lying around the house that's just accumulating dust. Hop on Ebay, Half.com, or place ads in a classified section to acquire a lump sum to start off your savings plan with. Why? Because the longer your money is invested, the more it will earn. You want to start off with as much as possible.
4. Figure out how much you really need to live on, and multiply that amount by .10. That will help you determine how much you will need in savings to make what you desire each year at a 10% rate of return (the average rate of return on stocks over the last several decades). For example, if you need $30,000 a year to live comfortably, multiply that by 10 to see how much you will need in your investments ($300,000).
5. Figure out the amount you will need to save per month in order to reach your goal in ten years or less. If you need $300,000 in your investments, then you will need to save $2500 a month for 120 months, right? Wrong. Don't forget that interest will accrue and compound. Ask your financial advisor to help you calculate the true amount you'll need to save so that you avoid going broke trying to save!
6. A good rule of thumb is to pay down debts first, then focus on that magic number you have formulated. If you have no mortgage and no credit card bills, that number you need will go down dramatically.
7. Watch, wait, and add. It's that simple. There are no tricks, no insider secrets. Produce additional income, put it away, and sell a few things to kick start your savings plan with. Get a little risky, but do so with the counsel of a financial advisor and the use of your common sense.

Tips & Warnings

• Don't go broke trying to save. Give yourself a little room to splurge. After all, spending ten years scrimping can cause you to miss out on a lot of life experiences! Be realistic in the amount you can really put away, and budget in some fun, too.
• While a financial advisor may seem expensive, a few hours of his/her time will pay for itself in the long run. Better to make a costly wise choice now than an expensive mistake later!