Early Retirement Blog

If you are one of the millions of American workers who has very little to no retirement savings, and who earns less than $50,000 per year, I have developed two simple savings plans which will easily allow you to go from zero savings to $1 million dollars in 20 years –   The $500 Plan and Save Your Raise.

The $500 Plan
Starting with zero savings, you can easily save $1 million dollars in 20 years, by following this simple method.   Begin saving only $500 per month, and then next year and every year after that, increase your monthly savings by $100.   So next year you save $600, and the year after that $700, and after 20 years you will have $1 million dollars.

That’s it, that’s all there is to it, nothing more complicated.  For ideas on how to reduce your spending, and increase your savings, read 10 Ways to Save $1 Million.

What if you can’t save any money?   You can’t even afford to save $100 per month for retirement?   There is a way you can save even more for retirement than the $500 Per Month Plan – Save Your Raise.

Save Your Raise
If you earn $45,000 per year, and every year you get a 5% raise,  save your raise and do not spend the extra income, and after 20 years you will have $1 million.

If you earn more than $45,000 per year, and use the Save Your Raise method, you will end up with more than $1 million after 20 years.  Using these two Early Retirement Methods almost anyone, even someone who has no savings, can become a millionaire in only 20 years.

However, you do not need a million dollars to retire, in a previous article I wrote about how to retire with less than $1 million.   And, that means, you can retire in less than 20 years.

The savings in this example were invested using the Green Retirement Asset Allocation Model of 75% S&P Index Fund and 25% Treasury Direct.   The historical average return using this model is 9%.

You are reading the Early Retirement Blog, visit the Early Retirement Website, to learn how to retire early, and try our free retirement calculators.