by Dallas Brown

Created on: June 24, 2009

Retiring at twenty may sound impossible, and it probably is. But I've known some twenty year olds who had already taken the necessary steps to build up an early retirement nest egg. There are three simple steps involved.

Save all you can from age fifteen to twenty. These five precious years are usually spent scrimping and saving for college, and then spending it all on four years of education, while still borrowing enough to assure your future an outgoing expense which is yet unaccounted for, but will ostensibly be covered by the great income you are making after graduation. While this is not guaranteed, (as little in life is), it seems likely that the "on the ball" crowd will be afforded such jobs first.

This first step requires that you place five thousand dollars a year into a Roth IRA. Certainly, at this age, you may qualify for a Roth. And most can find some way to get a job that first year, even if it involves self-employment, mowing lawns or walking dogs, baby sitting, anything that can produce consistent income throughout the year. This requires a $416.66 deposit each month into your Roth IRA. The Roth IRA is selected at this time as the best vehicle available for your investment activities, since it assures NO taxes upon withdrawal at retirement time. Many other advantages are now available, but this one goes on top. Imagine having a one million dollar pile of cash at age 55 with no taxation allowed!

How do you reach that figure? Even with a modest 8% return on your investments, even in a growth and income mutual fund, that $416.66 will get you over the top. Just continue to invest that money, for at least five years, all the way from age 15-20, (or 16-21 if you can't get that job at age 15). At the end of the five years, you will have invested $25,000 of your own cash. At the return rate of 8%, you will then have a balance of $30,614.87. Now, here is the best part.

Stop all your investment deposits to this fund. Just let that $30,000 continue to grow at 8%, for forty-five more years. The result will be a balance of $498,794.256 at age fifty-five, and $1,107,143.78 by age sixty-five. This money alone can provide you with a comfortable retirement in the future. Yes, we are talking some scary numbers here, for we can't be sure of the future conditions of the economy of our country. Yet, prosperity has always followed adversity in our nation as a matter of natural occurrence, due to the changing needs of the economy itself. And 50 years from

• 1
• 2
• Next Page >>