Retiring in 10 Years with No Savings: A Faster Wealth-Building Strategy

Many Americans are approaching retirement with little to no savings and limited time to turn things around. To retire comfortably in 10 years, eliminate debt using the avalanche or snowball method, then focus on wealth-building strategies like career changes, long-term investing, and fast savings. Consider trimming monthly expenses and budget to free up more money for debt repayment.

Many Americans are approaching retirement with little to no savings and limited time to turn things around. According to a Northwestern Mutual survey, the “magic number” for retirement savings is $1.5 million, but the median household net worth in 2022 was just $176,500 [1]. About 20% of adults over 55 have no retirement savings at all [1]. To retire comfortably in 10 years, eliminating debt and focusing on wealth-building strategies are crucial.

The first step is to eliminate debt using the avalanche or snowball method. The avalanche method targets the highest-interest debts first, while the snowball method focuses on smaller debts. By freeing yourself from monthly interest payments, you can move on to the next step of building wealth. Consider trimming monthly expenses and budgeting to free up more money for debt repayment. For instance, saving money on home insurance with OfficialHomeInsurance.com could help. According to the company, savings of up to $482 a year can be achieved by comparing rates from over 200 insurance companies [1].

Once debt is managed, focus on wealth-building strategies. Career changes, long-term investing, and fast savings are key. For those over 50 or 60 with no nest egg, typical wealth-building strategies may not be enough. However, bold moves can help. Saving as much as 50% of your income may seem extreme, but it can help reach a modest retirement goal faster. According to SmartAsset, saving 50% of the median income between 45 and 54 ($69,472 per year) would yield about $34,736 a year, or $2,900 per month. Investing that amount in a low-cost index fund like Vanguard’s S&P 500 ETF (VOO) could significantly grow your savings. The fund has delivered a 14.55% annualized return since its inception [1].

Additionally, consider side hustles or real estate investments. Starting a business or side hustle could increase your income, while real estate investments can provide high yields. Arrived, for example, allows you to invest in shares of rental homes and vacation rentals without being a landlord, with a minimum investment of just $100 [1].

Top executives at Brookfield Asset Management Ltd. also expect a shift in retirement savings, allowing Americans to invest in private assets like infrastructure or private equity. This could set off a new wave of growth for asset managers, doubling the size of the private markets industry [2].

In conclusion, retiring comfortably in 10 years is possible with strategic planning and quick action. Eliminate debt, save aggressively, and explore wealth-building opportunities like real estate investments and side hustles.

References:
[1] https://finance.yahoo.com/news/retire-10-short-years-no-223300940.html
[2] https://www.theglobeandmail.com/business/article-brookfield-sees-us-retirement-savings-market-opening-up-to-private/