3 Ways to Retire Early

There may be nothing more in keeping with the American Dream than achieving a level of financial security that allows for early retirement. Yet most people fall short of that goal. In a bid to change that, three of The Motley Fool's analysts share their best ideas on how to retire early. Read on to learn what they suggest.








Leo Sun

The key to retiring early is to start saving as early as you can.

A Forbes analysis revealed that if people started saving 10% to 15% of their annual income at the age of 20 to 25, they were generally able to retire comfortably (i.e., with their current living standards) by their late 60s. For those who wait until age 40 to start a savings account, that percentage soars to 43.2%. But if a person can save up 30% to 40% of their annual income at the age of 25 -- which might be achieved by scoring a high-paying job, living frugally, or working overseas -- an early retirement could be a realistic goal.

Those alarming figures highlight the importance of contributing to your Roth IRA and building up a stock/fund portfolio as early as possible. Maxing out your annual Roth IRA contributions and your 401(k) contributions, then investing the remainder in well-researched stocks or mutual funds could pave the way toward an early retirement.

That plan doesn't take into account student debt, job changes, or family emergencies. But the key takeaway is to constantly have an annual savings percentage in mind and to strive to meet that goal every year.

Read on, please click here 3 Ways to Retire Early