The phrase word "early" is the key part of this title. Whether you plan you retire early or plan to retire at the standard age, you need to plan early. That is the biggest key.

The most important tip I have for you is to contribute to your company's retirement plan. We'll call it a 401(k), as that is what the majority of them are. Regardless of your age, you should always contribute to your 401(k) plan.

401(k) retirement plans or other employer sponsored programs are extremely important and should be taken advantage of no matter what your financial situation is. Employers generally match a portion of your salary into these retirement plans, but only if you are also contributing (therefore the term "match").

Many people live paycheck to paycheck thinking they can't contribute to their retirement account in their current position. "I'll start contributing in a few years when I can afford it." But frankly, you can't afford not to.

Let's say an employer matches 3% of your salary into a retirement account. Let's say you make $40,000 per year. Your employer will contribute $1,200 per year, as long as you contribute that amount as well. If you contribute $1,200 per year (keep in mind this is pre-tax), it will only truly effect your paychecks by $960, assuming a 20% tax rate. If you do the math, that means not only do you get the extra $1,200 from your boss, you also get $240 tax savings for a total of $1,440. All the while you only spent $960 during the year to get $1,440, which equals a 150% return on investment. In addition, you will be contributing to a retirement account that will continually experience much higher gains than you would be able to achieve in even your highest yielding savings account or CD.

And the most important part? Start young! Even if you're 19 years old working full-time while putting yourself through college, begin contributing. The power of compounding interest for the next 40 years will be your friend!

This tip is simple: Contribute early, contribute often, and max out your employer's match to take advantage of the FREE MONEY!

Learn more about this author, Barry Tadmore.
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