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Retiring In 10 Years (Or Less): A Step-By-Step Guide

I want to let you know that I have not fallen off the truck. I retired last year at 52 after reaching financial independence in my 40’s. I always dreamed of being able to travel and explore the world.

My assets are arranged so that I don’t have to draw them down. I can make sure my savings last for a long time. They will last forever in theory. They are a great investment for people looking for something that will last a lifetime.

My 30-year march to retirement had ups and downs. It was a rewarding journey that taught me a lot. I missed a lot of great moves. I’m determined to learn from my mistakes and I’m proud of what I achieved.

Taking the best of what worked for me combined with what I wish I had done differently is what I consider to be the key steps to retiring as soon as possible. Everyone’s retirement journey is different and what works for one person may not be the best choice for another.

how to retire in 10 years or less

Afterward, I’ll give an example of how these steps can play out in the real world.

The ESI Scale

The three areas that drive financial independence are earning, saving, and investing. People can take control of their financial future if they learn how to make wise money decisions.

As you might imagine, the more you do of these three, the faster you’ll get to financial independence. Guidance is vague and doesn’t give a clear path to retirement. It’s important to have an overall financial plan that outlines specific steps to take to build retirement savings.

To reach early retirement, you need to determine what level of commitment you can make to each of the three steps, then make a plan to work on those. Tracking your progress along the way will allow you to adjust your strategy if necessary.

If you want to get home, you should consider where you can make headway and where you want to pull back a bit. It will be the most rewarding in the end if you take your time and find the path that feels right for you. I think the following steps give the best chance for quick success, but you have to decide whether or not they fit your lifestyle. It’s important to remember that everyone has different needs and goals, so take the time to think about what will work best for you.

Step 1: Create a retirement budget.

Before climbing a mountain, you size it up. It’s important to remember that a mountain can present unexpected challenges, so be prepared for the journey ahead. A post-retirement budget is similar to the retirement equivalent. Ensuring that your post-retirement budget will allow you to live a comfortable lifestyle is important.

In order to understand what you are shooting for in retirement, you need to know what you want to spend your money on. You can plan better for the future and make smart financial decisions if you understand your retirement goals and budget. You are off to make it happen once you do. Today is the day to commit to your goal.

It should be easy to set an estimate if you have a budget now. Tracking your spending for a few months will help you create a realistic budget. I had over 20 years of spending data in Quicken, which made it easy to develop my retirement budget. I was able to plan for the future with confidence because I was able to identify where I could afford to make cuts. I knew what our family needed in each category. We had a plan in place to make sure every need was met. If you have been keeping a budget for a while, yours will be easy.

You need to start from the ground zero. To get the results you’re after, you’ll need to do the research and put in the hard work. You should draft an estimate of your retirement spending as well as develop a budget for the next year. When estimating retirement spending, it’s important to factor in inflation. Bank and credit card statements are the best sources of spending estimates.

Step 2: Work to grow your career

Here are two great pieces of news about your career:

  • Your career is your largest asset and is literally worth millions of dollars
  • There are proven actions you can take to make it worth millions more

I am not overstating the value of your career. It’s important to know how your career can shape your future. The engine that drives the early retirement train is a career. It is important to maximize your earning potential if you want to reach financial independence and retire early.

There are seven steps that will grow your career and help you earn higher than average raises. You can start these right away. You don’t need any special equipment or training to start. I was able to earn over 8% annual raises during my 28-year career because I took a long time to learn some of them. Here’s how to get a raise. You have the potential to perform better if you are younger. You will have more time to hone your skills and become even better if you start early.

If you want to put the seven steps into action, you have to review them. If you want to stay on track, you need to review the plan regularly. Your bank account will appreciate you. You can make a big difference to your budget by taking a few simple steps to save money.

Step 3: Scour your budget for savings

Updating and reviewing your budget is one way to increase the gap between earning and spending as your earnings grow. This will help you save for future goals and emergencies, as well as build your financial security.

You will be able to identify steps to maximize your savings rate as you become more familiar with it. You will be better equipped to make informed decisions about how to best allocate your money if you take a closer look at your finances.

You should review your budget and make adjustments monthly. It’s a good idea to make sure your spending is in line with your financial goals. It was effective and wedid it.

By regular review and changes, you will make sure your budget is efficient. Ensuring that your budget is as effective as possible is something this helps you to do.

Step 4: Begin investing immediately

You will want to get that money working for you immediately as you create an ever-larger amount of savings. High-yield interest-bearing accounts such as CDs, money market funds, and other investments can be used to invest your savings.

Time is your biggest asset when it comes to investing. The earlier you start investing, the more time you have to benefit from compound interest and market growth. Your savings will grow if you invest more time. You can reap the rewards of compounding interest by investing now.

It can make a huge difference if you start investing immediately. Don’t let the fact that you don’t have a lot of money stop you from beginning your investing journey today. This is the area of my biggest financial mistake — Five years after graduating from college, I started saving and investing and it’s worth a lot. Don’t waste them. It is a precious resource and you should use it wisely.

If you have at least 10 years, I would start investing with low cost US stock-based index funds to maximize growth. The key to success when investing is to be patient and have a long-term strategy; your goals should be to build wealth over time, not to make a quick profit.

MM note: To learn more check out my investing strategy.

If you want to achieve financial independence, you need to work as hard as you can and get as much money as you can. By setting aside a portion of your income for savings and investing, you can create an even stronger foundation for your financial independence.

Step 5: Develop a side hustle

Having a side hustle can help your finances in a couple ways. Having an extra income will allow you to save more in a shorter period of time. If you want to save up for a big purchase or plan for retirement, this can be helpful.

If you have a side business in retirement, you will need to make less money from your assets in order to speed up your retirement date. It gives you the chance to create a positive impact in the world and enjoy yourself at the same time.

There are many side hustles that can be started. Side hustles are almost endless with the right motivation and creativity. I make extra money as a consultant and as a writer. I have been able to pursue more of my ambitions because of this additional income stream. I have considered becoming a pet-sitter or developing my own product. I’m looking for a way to make more money.

Pick something you enjoy, have fair earning potential, and teach you skills, then take some time and consider the options. If you find yourself stuck, don’t be afraid to ask for help from a friend or mentor.

Step 6: Don’t accumulate debts

Debt will be a killer during this process. The best way to avoid debt is to create a budget. You may already have some debt which will impact your numbers, but don’t make it harder on yourself by adding more.

Drive used cars, try to live rent free, and don’t succumb to the constant urge for the latest and greatest gadget.

You are focusing on saving money with this plan. You have to borrow to spend so much. This can lead to a cycle of debt and financial distress, as the interest on the borrowed money can add up quickly and make it hard to pay off the original amount spent.

You will have money to spend when you are working on early retirement. When you reach your early retirement goals, financial planning and hard work will pay off. You will definitely delay your retirement date if you go into debt.

Step 7: Keep at it

Stick with the steps. You will be able to achieve your goals by doing so. Everything else will be taken care of by time.

You should run your numbers at least once a year. This can give you insight into where you might be able to save more money, and help you make sure that your expenses and income are balanced. As you get more living expenses, the estimate of your needed retirement income becomes more and more refined.

Eventually, your retirement income will be higher than your expenses. You will be able to enjoy the retirement lifestyle of your dreams. You can retire from full-time work at that point. Enjoying the fruits of your labor and spending quality time with family and friends is what retirement is all about.

Running the Numbers

An illustration can be used to see how the steps will play out.

Let’s begin with the following assumptions:

  • You make $50,000 a year at your current job
  • You need $40,000 to live in retirement. Saving for retirement should be a priority, and it’s important to plan ahead to make sure you have enough money saved to cover your living expenses.

Here’s how to work the above situation to retire asap:

Save $20k per year and invest it immediately. Extreme early retirees have an average 40% savings rate. I speak from experience that it is do-able. You can make it happen with the right planning and dedication. You can invest more if you keep your standard of living low.

And before someone says “it can’t be done in [insert name of city they currently live in]” let me say that you may need to move to make early retirement happen because where you live has a major cost impact on your budget.

Get top raises by working at your job. To ensure the best rewards for your hard work, set achievable goals and strive to exceed them. You should be able to earn 5% raises easily if you follow the steps mentioned above. Some years will only be 3% but some could be 10%. It is important to note that the amount of raise you receive may depend on other factors such as your performance and the budget of the organization. If you earn 5% average raises and save all the increases, we will be conservative. These small increases can quickly add up to a lot of money in your savings.

You have set up a system where you save $20k every year and get over $50k in income. You will be able to reach your financial goals faster with this system in place.

Taking these steps alone will yield $450k after ten years. It is recommended that you invest additional funds each year in order to accelerate the growth of your savings.

Add in Your Side Hustle

There is a great benefit to your side business here. Making a side business can help you build financial security and freedom in the long run. You can get that side hustle up and running in the first year. You will be on your way to financial freedom in no time. In the first few years, you will probably not earn much, and anything you do earn will be put back into the business to help it grow. This period of time is an investment in your future success.

After three years, you will be able to earn $4,000 a year and add a couple thousand dollars a year to it. It may not seem like much, but you will be surprised at how quickly your income can grow with hard work and dedication. You save all of this income as well. You can use it for future investments or to buy something special.

After 10 years, if you add the side hustle into the mix, you will have over $550k saved/invested and a side business that makes $18k per year. It’s an excellent opportunity to increase your financial security and create a more comfortable lifestyle.

You’re ready to retire from full-time work. Enjoy the new freedom and possibilities of retirement as a result of reaching this milestone in your life. Here’s how:

  • The 4% rule allows you to withdraw 2% of your savings each year. You can live off your savings while preserving principal.
  • If you add in the $18k from your business, you can make 40k per year. You have taken the necessary steps to secure your financial future and this is a huge accomplishment.

You could down-shift to a part-time job that earns you $18k per year if you don’t want to develop a side hustle. It shouldn’t be hard for someone with the career skills you’ve developed over the past decade. I’m confident that you’ll make a great impression, because you have the capacity to succeed in this new challenge.

It Can Be Even Better

The numbers and results above represent a reasonable set of assumptions that could apply to many people. It’s important to do your own research and determine what assumptions are best for your situation. The numbers can be improved by just one or two extra pushes.

Consider the numbers above with the following changes:

1. You could make $60k per year. This would allow you to increase your earning potential and boost your career. Or even higher. We could go as high as $65k with the right candidate.

2. You could save 50% of your income. You will be able to build your savings much faster if you do this. Or maybe more. 50% is the passing rate for this test.

3. It is difficult to say you could earn a higher rate of return than 8%, but what if you could earn 9% or even 10%? This could help you reach your financial goals faster, and improve your investment returns.

4. It’s easy to make more than $18k per year from your side business. If you just earn $100 a week, that will get you to $5,200, well ahead of the $4,000 we suggested. Don’t be discouraged if you start with a small amount. It isn’t likely that it will take you three years to get to this level.

We assumed you don’t have any savings. Even if it’s just a small amount, it’s important to start saving now. You have a head start on your retirement nest egg if you have some. Saving for retirement can seem like a daunting task, but even small amounts saved today can make a big difference later on.

The numbers are doable for a couple who both work. They could be looking at retirement within a decade. Depending on their retirement savings and other financial factors, this could be sooner than expected.

Wrapping It All Up

You can use the principles above to run your own numbers. It’s important to remember that small changes in your spending habits can have a big impact on your financial future.

You might be able to earn more and save less. You can increase your savings by investing your money. Maybe you are better at saving than earning. If that is the case, budgeting and smart financial planning can help you maximize your savings. A $30k per year business is possible if your side hustle becomes a $30k per year business. You might be able to turn it into a full-time job, giving you the freedom and flexibility to live life on your own terms. Simply run the numbers with your likes and dislikes, see where that puts you on the road to retirement, and adjust as needed. If you want to meet your retirement goals, you should take a look at your budget and see what you can save. Don’t stress if you don’t do as well as others because we all take different paths. Don’t compare yourself to others, because the path you take is unique to you and your own journey, and focus on yourself. It is not a competition. Everyone should be celebrated for their hard work.

Now the retirement police may say “well you’re not really retired if you’re working part-time or on a side hustle.” Who cares what others say? It’s important to remember that you should make decisions based on what is best for you and not be swayed by the opinions of others. If you want to be completely retired, simply put more effort into the steps noted and save more. To make sure you can achieve your retirement goals, talk to a financial advisor. Add a bit more time by taking the steps as they are. If you need to make the steps easier, you can always modify them. As long as you want it to be, the plan can be as flexible as you want it to be. You can change the plan if you need it to meet your needs.

Who cares if it takes longer than ten years to retire? Regardless of how long it takes to retire, you should always be focused on your financial goals. You are retiring in 15 to 20 years before most people. It’s never too early to start planning for your retirement, so that you can make the most of what is sure to be a very rewarding period of your life.

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