I want to retire at 50, what can I do to make it happen?

Question

I'm 20 now, junior getting a business degree, what things can I do to increase my chances of reaching my goal?

Answer 1

Getting your degree is a good start. When you get out of school and are working full-time, live below your means and invest the money you aren't spending.

Good luck.

Answer 2

Try to live as close to your college lifestyle as possible when you are in the "real world". It is true that you will have to spend on some things that are covered when you are a college student. However just because you start making a good salary does not mean you need to rush out and buy a car or take on other expenses.

The tough thing about such a young retirement age is that you have to find health insurance until you can get Medicare coverage. You also need savings in taxable accounts to support you until you can withdraw from your retirement savings. Also 25/30 years is not a long time for your investments to increase. Another 5 years can make it a lot easier to accumulate more money.

However retiring at 50 is a good goal and even if you don't reach it and retire comfortably at 55 you will be ahead of most other people. One plan you might consider is working and accumulating savings until you are in your late 40s and 50s, and then "downshifting" into part time work or something that is less financially rewarding. If you can break-even during your downshifting phase, your retirement assets will have extra time to grow.

Answer 3

Start investing on a mutual fund as soon as you can. Due to your age, I recommend the Dodge & Cox Income Fund (DODIX), offering both low expense and risk. This no-load fund is still open to new investors and although it currently is not doing too well, you do get paid dividends every quarter so this offsets the losses and in the long run you will come out ahead. You need $1,000 to open an account and invest a minimum of $100 either monthly, quarterly, etc.

If you can open two funds, I also recommend the Dodge & Cox International Fund (DODIF). Still low expense, no load but higher risk and higher returns.

With D&C you can set up a direct investment plan.
You do not need a broker to invest with Dodge & Cox and they only charge $12.50 per year no matter how many accounts you have. I suggest you open a straight IRA (tax deferred) where you can rollover your 401K's when you change jobs.

Bottom line is that you will retire early if you live below your means and never stop investing towards retirement.

Buy an apartment as soon as you can and upgrade through the equity you will build with time.

Unless you are making lots of money, limit the amount you spend on a car to under $20,000. Remember, money spent on a car devalues quickly and this investment will never give you a return.

Answer 4

I was given this advice by a millionaire: He said to make sure that what you do for a living is what you enjoy doing. If it requires a college education then get it. Next, talk to other people who are wealthy to find out where they are putting their money. He said most rich people don't mind sharing their strategies. Let the rich person you have contact with know that you are wanting to invest your money and ask them what they think. Also, obtaining a personal financial consultant is well worth the time. They can be a plethora of information.
Every time you want to spend money, ask yourself if this is really necessary or can you go without it. Look at how much junk people accumilate by the countless yard sales that go on every weekend. Most of it is junk.
There are also some really good books that can expand your mind on how to build wealth. My favorite is Suze Orman. She keeps it simple and understandable and her methods work.
Be prudent with every dime, but make sure you have some fun along the way. Godspeed!

Answer 5

Run to the bookstore and buy a copy of the latest copy of Kiplinger or Money that has Retirement on it.

It's good to start this process at your young age but it'll require sacrifice along the way. I started much later (age 30)

Basic Rules:
Max out your 401K with your employer matching. Your HR should have details. Earnings will be tax free when you need to withdraw after age 59.5 (or sooner...but what 35 years).

Invest in a Roth IRA. I'm 50 now. I got married and had a daughter (who went to Boston College and then NYU for her Masters). It paid to invest in those areas that would yield tax deferred (401K) or tax free earnings (Roth).

Do your homework now and research....The advice I got 15 years ago made alot of sense.

Answer 6

First step is to decide what kind of life you want to have at retirement and how much it will cost. Next analyze what your money path will bring you to with the current income and expenses.
I use a budget program called CalendarBudget.com that allows me to look into the future and see how much money I will have in my account at any given day.
RRSP's allow you to invest money that will then accumilate more intrest at a faster than your regular bank account.
Use the program to make a plan that will show you all of your daily income and expenses. Then decide which expense really need to stay and will allow you to save even more in the long run. Every penny counts.

Answer 7

You are very wise to ask that question at your age.

I agree with Lisa. Get the book The Automatic Millionaire by David Bach. If you read the book - then you deserve to retire at 50 and live the life of your dreams. It's brilliant.

Good Luck.
http://www.SoGettingRich.com

Answer 8

Go to your local library, and get a book called "The Automatic Millionaire", read it, and do everything it says.

Lesson one in living below your means is this: remember, don't buy the book! Utilize your local library.

Answer 9

move to a third world country that has a low standard of living and you could retire with a couple hundred grand.. of course you better hope you don't get sick and need medical treatment..