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How to Retire in 20 Years or Less

September 25, 2018 by Steven C. Johnson, ChFC®

Have you ever thought about how many more years you have to work? For someone in their mid-20s, you could have a long way to go considering the official retirement age is 65.

That’s forty more years of working in a job you may not love, or forty more years of being obligated to show up to some office, Monday through Friday, and spend all day doing tasks that you don’t find meaningful or fulfilling.

Sounds kind of miserable when you look at it that way. But, thankfully, your life doesn’t have to look like this.

What If You Could Retire in 20 Years – or Less?

The reason most 20-somethings can expect to work until at least 65 (and possibly much longer) is because they either don’t save and invest for their future, or they don’t save enough.

Traditional financial wisdom tells you to invest about 10 percent of your salary. If you do this from the time you enter the workforce until you’re 65, you’ll likely have enough money to retire at that point.

But that’s the problem with saving such a small percent of your income: it takes a long time to build up enough assets in your investment portfolio to actually make earning a paycheck optional, and allow you to retire.

You could easily retire in 20 years or sometime in your 40s if you simply save and invest greater percentages of what you earn. In fact, the math behind early retirement is pretty simple. The gist of it? The more you invest right now, the faster you can get to a place where work is optional.

Specifically, to retire in 20 years, you need to invest between 40 and 50 percent of your income:

https://www.fool.com/investing/2017/06/17/1-chart-may-change-everything-you-know-about-achie.aspx

Source: The Motley Fool

Want to retire even sooner? Then save a larger percentage of your income. You could retire in just 9 years from now if you committed to putting 70 percent of your income into your investment accounts and retirement plans. Of course, that’s not feasible for a majority of us and be able to survive financially now.  But it’s a great starting point of discussion.

How to Save a Bigger Percentage of What You Earn

The way to retire in 20 years or less is pretty simple to understand: set aside larger portions of your income and invest it. But most people can’t or won’t take 10 percent of their paycheck and allocate it to their 401(k), IRA, or another investment vehicle to earmark it for the future.

Saving and investing more does require you to cut back on your spending today. You have to prioritize some delayed gratification.

You can do this by:

  • Downsizing your biggest fixed expenses (look for lower-cost rent or take on roommates, for example).
  • Creating a budget and tracking your spending (and also eliminated the fat from that budget and being more mindful about how you use your money).
  • Looking for ways to save on what you need to buy.

But even if you live more frugally than you do now and look to cut expenses in a reasonable way (that doesn’t leave you feeling extremely deprived), you need more than just discipline and willpower to say no to little things today so you can get to something bigger in the future.

You need a strong income to be able to afford even most modest living expenses and bank 40 to 50 percent of what you earn. In addition to cutting back on discretionary expenses, you need to strategically boost your income to retire in 20 years or less.

That could include doing things like:

  • Learning new skills so you can demand more pay.
  • Taking on more responsibility so you can better negotiate for a raise at your current job.
  • Changing positions and negotiating a higher starting salary at a new job.
  • Starting your own business (or at least, a side hustle).

Invest Wisely

Just sticking your retirement savings in a low -cost index fund maybe the simplest and least expensive approach but may not always be your best option.  How your funds are invested are just as important, if not more important than the amount of funds you are setting aside.

Finding the right balance between being too conservative and not having enough to retire, or being too aggressive, and a market correction giving you the same result, not having enough funds to retire, can be tricky.

A prudent approach is to work with a fee-based investment advisor who can help ensure your investment approach is properly linked to your financial goals.

It’s Not Retirement, It’s Financial Freedom

Of course, the idea of retiring — even if it is within 20 years instead of 40 or more — might not appeal to you at all. The traditional definition of “retiring” literally means retreating from work… and often, a complete lack of work leaves people even more unhappy than holding a job they don’t love.

Work gives life purpose and meaning, so to quit it entirely might not appeal to you. If that’s the case, don’t think about this as “how to retire in 20 years.” Instead, reframe it as “how to be financially independent in 20 years or less.”

In other words, by following this strategy, you make working something that becomes optional – and that means you have more freedom and choice over what you do for work because you won’t be bound to a particular paycheck.

You can spend your time exploring your interests and your passions. You might even want to take on work that’s really meaningful to you but isn’t realistic now because it doesn’t pay enough.

When you’re free from the obligation to earn a certain income, you get more say in what you actually do with your time.

It’s not just about retiring, or quitting work and sitting around doing nothing. It’s about the fact that money can provide freedom, choice, and flexibility — and you can access total financial freedom in 20 years or less if you simply commit to investing more of your income.

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Eric C. Jansen, ChFC

Fun Facts About Me

When he is not researching the next great stock to add to client portfolios, you can find him travelling frequently with his family to Jackson Hole Wyoming.

  • Hometown: Chicago, IL
  • Birth Month & Year: November, 1964
  • Favorite Hobby: Goldmining in Nome, AK
  • Favorite Food: Steak at Charley’s Steakhouse in Orlando FL
  • Can't be interrupted when: Watching the Discovery Channel
  • Hidden Talent: Finish Carpenter
  • Something on bucket list: Obtain Helicopter Pilot License
  • Family Pet: Goldfish

Steven C. Johnson, ChFC

Fun Facts About Me

Steve would tell you that one of the best parts of the day is spent talking to clients and relationships that result from it. When away from the office, he loves to travel the back roads of New England enjoying all the great sites that can be found off the beaten path.

  • Hometown: Townsend, MA
  • Birth Month & Year: December, 1967
  • Favorite Hobby: Playing Hockey
  • Favorite Food: Chicken Caesar Salad
  • Can't be interrupted when: Watching the Bruins
  • Hidden Talent: Cooking – Makes a great Thanksgiving turkey
  • Something on bucket list: Travel to Italy and Greece
  • Family Pet: Max – our Pomeranian

Frederick M. Lane, ChFC, CASL

Fun Facts About Me

When not managing client portfolios, Fred can be found relaxing with family and friends.

  • Hometown: Nutley, NJ
  • Birth Month & Year: July, 1954
  • Favorite Hobby: Dog Walking
  • Favorite Food: Italian
  • Can't be interrupted when: Listening to Pink Floyd
  • Hidden Talent: Landscaping
  • Something on bucket list: Space Flight - Tourism
  • Family Pet: None

Catherine Utley

Fun Facts About Me

  • Hometown: Huntington Beach, CA
  • Birth Month & Year: February 1977
  • Favorite Hobby: Anything that gets me outdoors exploring nature
  • Favorite Food: Anything Mexican
  • Can't be interrupted when: Drinking first cup of coffee for the day
  • Hidden Talent: Putting together complicated puzzles
  • Something on bucket list: Over the water bungalow in Fiji
  • Family Pet: Currently between pets. Previous owner of 2 adorable pugs

Catherine M. Gareri

Fun Facts About Me

When not caring for her clients Cathy enjoys relaxing in her yard at home.

  • Hometown: Bellingham, MA
  • Birth Month & Year: July, 1957
  • Favorite Hobby: Cooking and Entertaining
  • Favorite Food: Steak at the Capital Grille
  • Can't be interrupted when: It's family time
  • Hidden Talent: Dog Whisperer
  • Something on bucket list: Spending a couple months on the Almalfi Coast
  • Family Pet: In Between Mastiffs now so a little blue fish “Willy”

Katie E. Moore, CLTC

Fun Facts About Me

When Katie is not busy taking care of her clients, she spends her time being a mom to her two little ones, Owen and Isla.

  • Hometown: Modesto, CA
  • Birth Month & Year: September, 1982
  • Favorite Hobby: Swimming
  • Favorite Food: Mexican Food
  • Can't be interrupted when: I'm cooking
  • Hidden Talent: Climbed Yosemite's Half Dome, twice - no fear :)
  • Something on bucket list: See the Northern Lights and Potty Train my 2 year old
  • Family Pet: Caddy and Sierra – our two cats

Herbert Kyles

Fun Facts About Me

When Herbert isn't reviewing your portfolio or assisting you with your financial well-being you can probably find him relaxing with friends.

  • Hometown: Overland Park, KS
  • Birth Month & Year: November, 1989
  • Favorite Hobby: Hockey, Golf & Cooking
  • Favorite Food: Chipotle
  • Can't be interrupted when: Studying
  • Hidden Talent: Fluent in French
  • Something on bucket list: Demolition Derby
  • Family Pet: None

Hesper Duval

Fun Facts About Me

Loves spending time with 2 daughters and enjoys participating in 5k obstacle races throughout the year.

  • Hometown: Charlton, MA
  • Birth Month & Year: October, 1981
  • Favorite Hobby: Running
  • Favorite Food: Cheesecake
  • Can't be interrupted when: Reading a good book
  • Hidden Talent: Interior Design and furniture restoration
  • Something on bucket list: To travel cross-country in an RV
  • Family Pet: Charlie and Nora, both black labs from the same litter

Donna Fournier

Fun Facts About Me

When not cheering for the Patriots, Donna spends her free time travelling throughout the United States looking for new haunted places to explore. She loves to wear her cowboy hat and boots when travelling out west.

  • Hometown: Swansea, MA
  • Birth Month & Year: February, 1961
  • Favorite Hobby: Exploring haunted locations
  • Favorite Food: Pizza
  • Can't be interrupted when: Eating my pizza
  • Hidden Talent: Rollerblading
  • Something on bucket list: Travel to Australia
  • Family Pet:  Had a pet skunk

Anne Whitney

Fun Facts About Me

  • Hometown: Jaffrey, NH
  • Birth Month & Year: September 1988
  • Favorite Hobby: Drawing and painting
  • Favorite Food: Anything spicy!
  • Can't be interrupted when: Reading a good book
  • Hidden Talent: Expert calligrapher
  • Something on bucket list: Go to San Diego Comic Con
  • Family Pet: Most recently, a rescued beagle named Max

Steve Taylor

Fun Facts About Me

  • Hometown: Franklin, MA
  • Birth Month & Year: May 1975
  • Favorite Hobby: Golf
  • Favorite Food: Pizza
  • Can’t be interrupted when: Spending time with my family
  • Hidden Talent: Juggling
  • Something on bucket list: Play golf at Pebble Beach
  • Family Pet: none

Sarah Kupec

 

  • Hometown: Wyckoff, NJ
  • Birth Month & Year: November, 1992
  • Favorite Hobby: Hiking
  • Favorite Food: Chipotle
  • Can't be interrupted when: Watching LSU football. Geaux Tigers!
  • Hidden Talent: Chalkboard art
  • Something on bucket list: Travel to Germany
  • Family Pet: Max, a 14-year-old Westie

Cathy Hession

Fun Facts About Me

When away from the office, Cathy enjoys working out and participating in the 26.2 mile Jimmy Fund Marathon Walk each September.

  • Hometown: Hanover, MA
  • Birth Month & Year: May, 1964
  • Favorite Hobby: Travel & hiking
  • Favorite Food: Danny's Homemade Sauce
  • Can't be interrupted when: Watching Katie ride
  • Hidden Talent: Equestrian photographer
  • Something on bucket list: Spend a month in Monterosso Al Mare w my family
  • Family Pet: Sassy, our Australian terrier

Kieran Lavery

  • Hometown: Bedford, NH
  • Birth Month & Year: November, 1989
  • Favorite Hobby: Playing tennis and softball
  • Favorite Food: Tex-Mex
  • Can't be interrupted when: Watching college basketball
  • Hidden Talent: Can solve a Rubik's cube in under 2 minutes
  • Something on bucket list: Attend Oktoberfest

Matthew Cleary

In his free time, Matt likes to hike, camp and travel with his wife Gina.

  • Hometown: Farmington, Maine
  • Birth Month & Year: March 1986
  • Favorite Hobby: Hiking
  • Favorite Food: Lasagna
  • Can't be interrupted when: Watching the Celtics
  • Hidden Talent: Water skiing
  • Something on bucket list: Traveling to Greece
  • Family Pet: Aspiring British Bulldog owner

Justin Giuliano

When not helping clients, Justin enjoys spending time with his wife and family while settling into his new home.

  • Hometown: Wethersfield, CT
  • Birth Month & Year: July 1988
  • Favorite Hobby: Exploring new destinations with my wife
  • Favorite Food: Frutti di Mare
  • Can’t be interrupted when: Grilling
  • Hidden Talent: A unique inability to sit still
  • Something on bucket list: Traveling to Europe

Rana Choubah

When Rana is not helping clients with their financial needs, she spends her time with her family traveling, hiking and running.

  • Hometown: Beirut, Lebanon
  • Birth Month & Year: October 1967
  • Favorite Hobby: Running
  • Favorite Food: Pizza
  • Can't be interrupted when: Reading a good book
  • Hidden Talent: Construction and home repair
  • Something on bucket list: Complete a triathlon
  • Family Pet: Two sweet cats, Macy and Maya

Krista Isabelle

In her free time, Krista can be found crafting or playing outdoors with her husband and son, curled up reading next to her beloved cat, "Berg", or cooking her favorite go-to meals.

  • Hometown: Acton, MA
  • Birth Month & Year: August 1994
  • Favorite Hobby: Graphic Design
  • Favorite Food: Anything with peanut sauce
  • Can’t be interrupted when: Reading
  • Hidden Talent: Cartoon Drawing
  • Something on her Bucket List: Fostering animals

Danielle Drew

When Danielle does not have her head in a book studying to expanding her financial planning knowledge, she enjoys anything active and outdoors, including visits to the beach and hiking.  

  • Hometown: Dennis, MA
  • Birth Month & Year: November, 1985
  • Favorite Hobby: Working out, concerts, and exploring wineries
  • Favorite Food: Lobster pot pie, cheeseburgers, BBQ, the list goes on...
  • Can't be interrupted when: Working out 
  • Hidden Talent: Country line dancing
  • Something on bucket list: To hike the 48, 4000 footers of New Hampshire
  • Family Pet: none, hopefully a big dog someday

John "JP" Bisceglia

JP loves spending time with his niece and enjoys weekend trips to the cape during the summer.

  • Hometown: Shrewsbury, MA
  • Birth Month & Year: October 13th 1993
  • Favorite Hobby: Fishing with friends and family
  • Favorite Food: Pasta Alleluia
  • Can't be interrupted when: Hiking Wachusett Mountain with the pup
  • Hidden Talent: Navigating and driving boats
  • Something on bucket list: Helicopter snowboarding in Japan.
  • Family Pet: Alaskan companion noble dog

Jay Willwerth, ChFC

Fun Facts About Me

Jay’s days are spent helping clients achieve their financial goals, followed by nights and weekends typically watching his daughters play competitive volleyball.

  • Hometown: Melrose, MA
  • Birth Month & Year: September, 1959
  • Favorite Hobby: Golf
  • Favorite Food: Anything at a Patriot’s Tailgate
  • Can't be interrupted when: Watching the Patriot’s Game
  • Hidden Talent: Competitive Volleyball Watcher (Mostly his 2 daughters)
  • Something on bucket list: Play a round of Golf at Pebble Beach
  • Family Pet: Bella, our Shih-poo