What Would You Do for a 90% Profit?

Tick. Tock. Tick. Tock. Tick ...

That's the sound of your retirement clock, and it's winding down. The years are racing forward, and before you know it, you'll be retired and depending on government largesse for a large portion of your income. But did you know that there's a way to rewind this clock, to give yourself extra time to prepare the nest egg you need to fund a fruitful retirement -- and make yourself a tidy profit in the process?

Sure, there's a catch -- there's no free lunch, after all. But this catch may be well worth it. Interested? Then read on.

Two ways to retire wealthy: fantasy and reality
There are two ways to amass the wealth you need to fund a fantastic retirement. Depending on what you've done so far, though, the best way may be sheer fantasy. If you're like me, and you've been tucking money away despite the market's ups and downs, chances are you're doing all right by now. A steep market crash hasn't kept shareholders of Annaly Capital Management (NYSE:NLY), Schering-Plough (NYSE:SGP), and Chipotle Mexican Grill (NYSE:CMG) from booking gains ranging anywhere from 40% to 60% so far this year.

60% profits -- that sounds pretty nice. But what if you forgot to invest, or even cashed out at the bottom? Well, good news, Fools. I'm going to teach you a way to earn a 90% profit -- and you won't have to invest a dime to get it. All you need to invest is a little patience.

Woulda, shoulda, coulda ... retired
I'll use myself as an example. Let's say I'm age 55, and staring down the barrel of an impending retirement. Officially, I'm "supposed" to retire at age 66. That's the government's "full retirement age" for persons born in 1954. But current law permits me to retire with reduced benefits as early as age 62. Or I can keep on working if I prefer, with benefits increasing the longer I defer retirement up to age 66.

Why would I keep working for a paycheck, past an age at which I'm entitled to free money? Good question. The answer is: To get more free money. According to the Social Security Administration, if I retire early at age 62, then depending on my earnings up until that date, I might be entitled to a $1,000 monthly Social Security check. (Again, your numbers may vary.) Nice, but insufficient to fund my retirement in Tahiti. If, however, I postpone my travel plans to age 70, my social security check could swell 90% in size, to $1,900.

Think about that. A 90% "profit" in just eight years.

What would you do for a 90% profit?
Now, the SSA admits that the decision on when to retire "is highly personal and depends on a number of factors, such as your current cash needs, your health and family longevity ... your anticipated future financial needs and obligations," and so on. But what it really boils down to is a gamble:

• If I postpone retiring, but die before I reap the full benefits of my patience, then I lose the bet. (Then again, at that point I probably have bigger things to worry about than money.)
• Alternatively, if I can keep the Grim Reaper at bay long enough to cash the bigger paycheck -- and make up for eight years of free money foregone -- then I've added $10,800 to my annual income.

How long to break even?
The SSA tells me that as a hypothetical 55-year-old male, my life expectancy today would be 24.37 more years -- requiescat in pace at age 79. Here's how the numbers break down under this scenario:

*Note that for the purposes of this example, we are assuming no increase (or decrease) in monthly SS payouts, nor any changes in the laws governing when I can retire or at what rates. Last but not least, your particular SS payout could be larger or smaller than this example. As with so many things in life, your mileage may vary.

According to the statistics, I can retire at age 62, suckle at the government teat for 17 years, then expire in my sleep, comfortable in the knowledge that I got my fair share from the government. Alternatively, if I stick it out and don't retire until age 70, my take after nine years of retirement will be ... almost exactly the same.

So assuming my mortal coil abides by the laws of statistics, and does not vary too much from its stamped expiration date, there is no difference between retiring early and retiring late. As far as my cash haul is concerned, I break even either way on the Social Security payout (but of course have the eight extra years of paycheck savings to add to my nest egg).

You pays your money (into the "lockbox"), you takes your chances
But what if I beat the odds? What if I live a little longer than the statistics say I should? Or more interestingly ... what if I'm a woman?

According to government statistics, the female of the species outlives the male by about four years. Were I a member of the fairer sex -- or just an inordinately long-lived male -- then here's how the numbers work out through my late lamented passing at the ripe old age of 83:

Now that's more like it. A quarter of a million dollars is nothing to sneeze at, but I can net a $44,000 windfall by delaying retirement under this scenario. (Time to see a doctor about a sex change ... that, or exercise more.)

Now here's the real kicker: The SSA warns: "About one out of every four 65-year-olds today will live past age 90." So ...

Yes, you read that right. If you're among the lucky one-in-four to outlive your peers and enter your tenth decade as a human being (age 90), you can increase your share of the Social Security trust fund by a whopping $120,000.

Foolish takeaway
There are many paths to a successful retirement, and there are many ways to earn a 90% profit. If you've got a time machine handy, you can do even better -- travel back to January 1, 2009, and pick up a few shares of:

But here's the real moral of this story: You don't need to be named "Herbert George Wells" to earn a 90% profit. In fact, if the stock market scares you, you don't even have to invest to do it.

By tweaking the date for when you retire, you can ensure how well your retirement will go. Putting in eight more years in the workforce may seem unappealing at first blush, but the benefits can be huge. Dedicate yourself to better exercising, eating, living, and saving, and aim to beat the statistical tables. Your retirement can be more enjoyable with better health, and more wealth.

So to all the soon-to-be-retirees out there, worrying that it's too late -- it isn't. The years are still there. It's entirely within your power to claim them.

Click here to get started, and learn more about how you can Rule -- not ruin --Your Retirement.

Fool contributor Rich Smith has no position in any company mentioned in this article. The Motley Fool has a disclosure policy.

Baidu and Chipotle Mexican Grill are Motley Fool Rule Breakers selections. Apple is a Motley Fool Stock Advisor selection.