How to Retire in 10 Years Starting from $0 Savings: The Ultimate Guide

Ready to retire in a decade? Learn how to accelerate your retirement timeline through extreme frugality, aggressive savings, disciplined investing and strict tracking. This comprehensive guide covers all the steps needed to retire in 10 years starting from $0 savings.

9 min readOct 23, 2023

Retire in 10 Years Starting from $0 Savings — Photo by Austin Distel on Unsplash

Retiring in just 10 years may seem like an impossible feat if you’re starting from $0 savings. However, with extreme frugality, aggressive savings, and disciplined investing, it is possible to accelerate your retirement timeline. This comprehensive guide outlines all the key steps you’ll need to take to retire in a decade even without existing savings.

Committing to the Extreme Lifestyle

The path to retiring in 10 years requires major sacrifices and living an extremely spartan lifestyle. You’ll need to be highly motivated by achieving financial freedom, rather than material comforts and possessions. This accelerated timeline is not viable for those wanting large families, extensive charitable giving, or leaving an inheritance.

To retire in 10 years, you must:

Drastically reduce discretionary spending
Commit to frugality in all areas of life
Downsize your housing, transportation, entertainment, etc.
Avoid lifestyle inflation as income rises

This may mean:

Living with roommates or family
Driving an old car or using public transportation
Rarely eating out or traveling
Shopping only for absolute essentials
Moving to a low cost area of the country

The key is eliminating all unnecessary expenses and luxuries. Each spending decision should be viewed through the lens of getting to retirement as fast as possible. You’ll need to creatively cut costs in every facet of life.

For example, buying used clothes at thrift stores, minimizing utility bills, foregoing cable TV subscriptions, cancelling gym memberships, and only taking staycations can add up to big savings. Meal prepping instead of eating out and restricting entertainment to free activities like hiking or the library are other ways to slash spending.

To make this dramatic lifestyle sustainable, you must truly believe in the purpose behind it. View frugality as a means to an end and stay focused on the financial freedom retirement will eventually bring.

Maximizing Income

Monetize Your Skills and Hobbies| Retire in 10 Years Starting from $0 Savings — Photo by Campaign Creators on Unsplash

To retire in a decade, maximizing your income is crucial. The more money you can earn, the more you’ll have available to aggressively save and invest. Here are some top strategies to boost income:

Increase Earnings from Your Career

Develop in-demand skills through training and education
Negotiate for raises and promotions at your current job
Switch to a higher paying job or field
Take on additional responsibilities to move up the ladder
Relocate to increase earning potential in certain markets

Finding ways to consistently grow your career earnings gives you more money to save. Often, investing in yourself through skills development opens the door to better opportunities.

In some fields like technology, finance, or sales, six figure incomes can become attainable fairly early on. The right career moves could significantly accelerate your retirement timeline.

Monetize Your Skills and Hobbies

Start a side business doing freelance work or offering consulting in your field.
Monetize a hobby like photography or baking through social media.
Rent out assets not being used like a parking spot, spare room or car.
Flip and resell items for profit using platforms like eBay.

Tap into the gig economy and find creative ways to earn extra cash on top of your regular income. Even an extra few hundred dollars a month from a side hustle or hobby adds up.

Work Overtime and Extra Hours

Take on overtime hours and shifts when possible
Get a part-time second job — nights, weekends or work from home gigs
Take on temporary seasonal work for extra cash

Putting in extra time at your main job or taking on additional jobs during your free time does require sacrifice. But it can be worth it to supercharge your savings in the short-term.

The key is being strategic — take on extra work in the years when you can handle it and your earning potential is highest. As you get closer to retirement, you may be able to coast more.

Avoid Lifestyle Inflation

As your income rises quickly, it’s crucial not to fall into the trap of inflating your lifestyle. Continue living below your means and avoid temptations to increase spending on housing, cars, gadgets or other luxuries. Consistently practice frugality and minimalism regardless of how much money you make.

Aggressive Saving and Budgeting

To retire within 10 years, you need to save aggressively — up to 75% or more of your income. This requires strict budgeting and tracking where every dollar goes.

Here are critical strategies for maximizing savings:

Save all money remaining after basic expenses
Eliminate all discretionary costs not absolutely essential
Downsize and take on roommates to cut housing costs
Reduce transportation costs by buying used vehicles and minimal insurance
Cut grocery and food spending through strategic meal planning and prep
Use coupons, buy generic brands, shop sales only
Cut out all restaurant, entertainment, and travel spending
Cancel gym memberships, club memberships, subscriptions
Avoid new clothing, gadgets, and other wants
Take advantage of free activities for entertainment

Saving such a high percentage of income requires strict discipline and frugality. But with diligent budgeting and cost-cutting, it can be achieved.

Max Out Tax-Advantaged Savings Vehicles

Contribute the annual IRS limit to 401(k)s and IRAs
Take advantage of employer match programs
Make use of catch-up contributions if over 50
Fund a Health Savings Account if eligible

Be sure to take full advantage of all available tax-advantaged savings plans. Fund these accounts first before contributing to taxable accounts.

Invest Additional Funds

Open a taxable brokerage account
Invest leftover funds after maxing out retirement accounts into index funds and blue chip stocks

By consistently investing any additional funds, you give your money more growth potential through the power of compounding returns over time.

Consolidate Accounts Closer to Retirement

As retirement approaches:

Roll over 401(k) funds into a IRA for more investment flexibility
Consolidate multiple IRAs and simplify your holdings
Shift some funds to stable value assets to lower risk

Consolidating and rebalancing your portfolio reduces fees and helps manage retirement risk. Take advantage of an IRA’s flexibility to invest more aggressively early on.

Investing Wisely For Growth

To retire within 10 years, aggressive saving is only half the equation — you also need to invest those savings wisely.

Here are the keys to maximizing returns:

Invest primarily in low-cost index funds and blue chip stocks.
Seek long-term capital growth through stocks versus bonds early on.
As you near retirement, incrementally shift some funds to stable assets like bonds.
Target an 8–10% average annual return through a diversified portfolio.
Reinvest all dividends and gains to compound earnings.
Avoid panicking and selling during market downturns. Ride out short-term volatility.
Consult a fiduciary financial advisor for guidance on asset allocation and strategy.

The goal is to maximize portfolio growth in the early years while also balancing risk appropriately as retirement nears. With the right asset mix, earning 8%+ returns is reasonable based on historical market performance.

This growth through compounding is how modest monthly contributions can snowball into a sizable nest egg in under a decade. Patience and an appropriate risk tolerance are required.

Here is a table showing potential portfolio growth over 10 years:


╔══════╦═════════════════════╦═══════════════════╗
║ Year ║ Annual Contribution ║ Portfolio Balance ║
╠══════╬═════════════════════╬═══════════════════╣
║    1 ║ $10,000             ║ $10,000           ║
║    2 ║ $10,000             ║ $19,000           ║
║    3 ║ $10,000             ║ $29,290           ║
║    4 ║ $10,000             ║ $40,993           ║
║    5 ║ $10,000             ║ $54,272           ║
║    6 ║ $10,000             ║ $69,333           ║
║    7 ║ $10,000             ║ $86,398           ║
║    8 ║ $10,000             ║ $105,709          ║
║    9 ║ $10,000             ║ $127,515          ║
║   10 ║ $10,000             ║ $151,976          ║
╚══════╩═════════════════════╩═══════════════════╝

This example assumes an 8% annual return on investments and reinvested earnings. By consistently investing over time, the balance grows exponentially.

Tracking Progress and Milestones

To achieve such an aggressive early retirement timeline, it’s critical to track your progress each year to ensure you’re on pace.

Document your net worth over time in a spreadsheet
Celebrate reaching savings milestones — mark major goals met
Review your spending habits and savings rate yearly
Reassess your overall strategy and make adjustments as needed
Stay motivated and focused on the final goal

On this rapid path to retirement, you need to diligently monitor your situation. Having clear milestones and tracking progress keeps you disciplined and on-track.

Here is an example milestone timeline for retiring in 10 years:

Year 1

Save $20,000
Reach $20,000 net worth

Year 2

Increase income by 10%
Save $25,000
Reach $50,000 net worth

Year 3

Start side hustle earning $500/month
Save $35,000
Reach $100,000 net worth

Year 4

Increase main job income by 15%
Save $45,000
Reach $175,000 net worth

Year 5

Save $55,000
Reach $250,000 net worth

Year 6

Save $65,000
Reach $350,000 net worth

Year 7

Save $75,000
Reach $475,000 net worth

Year 8

Save $85,000
Reach $625,000 net worth

Year 9

Save $95,000
Reach $800,000 net worth

Year 10

Save $105,000
Reach $1,000,000+ net worth
Retire by age 35!

Celebrating these smaller milestones helps you stay motivated as you work towards the ultimate goal.

Preparing For Early Retirement

As you approach your retirement date in year 10, you need to take steps to transition successfully:

Determine Income Needs

Estimate your expected annual spending in retirement
Identify all sources of retirement income:
Investment withdrawals
Social security benefits
Pension income
Part-time work
Make sure total income exceeds your projected annual costs

Carefully projecting your income and expenses helps ensure you can afford your retirement lifestyle. Build in some cushion for unplanned costs.

Align Investments to Retirement Goals

In the final few years:

Shift portfolio to more conservative assets like bonds
Move funds needed in the next 5 years to very low-risk vehicles
Arrange investments to generate consistent retirement income
Work with a financial advisor to put a withdrawal strategy in place

Your investment priorities shift as you transition to needing income versus growth. Manage risk prudently while still aiming for portfolio longevity.

Eliminate Debt

Ideally by retirement:

Pay off all credit card, loan and other debt
Pay off mortgage or downsize to a home you can pay for in cash
Don’t take on new debt and minimize expenses

Entering retirement debt-free gives you more financial freedom and flexibility. Your dollars can go purely towards funding your lifestyle instead of debt payments.

Line Up Healthcare

Research Medicare options and choose affordable supplemental plans
Take advantage of employer-provided health benefits while you can
If retiring before 65, secure ACA or private insurance

Getting the right healthcare coverage vastly reduces stress in early retirement. Take time to make informed choices.

Choose Where to Live

Decide if you will:

Stay in your current home
Move to a dramatically lower cost of living area
Relocate closer to family

Your home makes up a substantial portion of retirement spending. Pick the option best aligned to your financial and lifestyle needs.

Conclusion

While difficult, retiring in 10 years is achievable for the hyper-focused. With extreme frugality, maximizing your income potential, saving aggressively, and investing wisely, you can make it happen.

The key factors are:

Locking in the frugal, minimalist lifestyle
Increasing earnings through promotions, job changes, and side hustles
Saving a very high percentage of income
Investing savings for growth and harnessing compound returns
Tracking progress closely and making adjustments
Preparing investments, healthcare, debt, and housing for retirement

It also requires consistency, discipline, sacrifice, and perseverance. But for those highly motivated by financial independence, it delivers freedom decades earlier than a normal retirement timeline.

While this accelerated path isn’t for everyone, it is attainable for the committed. With diligence and determination, you can go from $0 to a fully-funded retirement in just 10 years.

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