Can you imagine living comfortably on $15,000 to $30,000 in annual retirement income? I didn't think so. But that's what most people can expect from Social Security if they retire at their full retirement age of 66 or 67 -- and only those who earned incomes well above average can expect those higher numbers.

So clearly, you'll want to be socking money away and investing it well, in order to supplement that. Here are some steps to take in order to beat the market -- which has, by the way, averaged annual returns close to 10% over very long periods. (It can average much less -- or more -- over just a decade or two.)

A green highway sign says Millionaire Next Exit.

Image source: Getty Images.

1. Be ready to invest

Before we even get to investing in stocks, are you ready to do so? You'll want to read up at least a little on investing before jumping in. While you do so, make sure that you pay off any high-interest-rate debt, such as that from credit cards, and that you have a well-stocked emergency fund able to keep you afloat for at least a few months, should you lose a job or get whacked with some hefty medical or automotive bills.

Money you park in stocks should be expected to remain there for at least five (if not 10) years, because the market can be volatile, and you don't want to have to sell for a loss in order to pay for a new clutch or to pay your rent. And credit card debt that you carry at high rates is likely going to cost you more than you earn in stocks: Many cards charge 20% to 30% in interest, while you might earn just 8% or 15% in stocks (though stocks can deliver returns much higher or lower, too).

2. Have a plan

Next, have a plan. Get at least a rough idea of how much you'll need to retire with in order to support yourself. Then figure out how much you'll need to save each month or year to get there. The table below can help:

Growing at 8% for

$10,000 invested annually

$15,000 invested annually

$20,000 invested annually

5 years




10 years




15 years




20 years




25 years




30 years




Data source: Author calculations.

It's also useful to read up on safe withdrawal rates in retirement that can make your money last as long as it needs to. One school of thought recommends withdrawing 4% in your first year and adjusting for inflation thereafter. The table below shows what you'd get in that first year using a 4% withdrawal rate, depending on the size of your nest egg:

Retirement Nest Egg

4% Withdrawal









$1 million


$1.25 million


$1.5 million


Data source: Author calculations.

Man at top of stairs made of cash, arms raised

Image source: Getty Images.

3. Save aggressively

If it's dawning on you that you might need to amass $600,000 to $750,000 before retiring, you're probably also realizing that you'll need to save aggressively. That's a far better plan than just saving this and that, and investing in things that you hope will grow at fantastic rates.

Look at the table above to see how much might be amassed. If you can swing saving $10,000 per year, think about whether you might up that to $15,000 per year -- or if you can save $20,000 annually instead of $15,000.

There are lots of ways to try to make that happen. You can find ways of spending less, for starters -- perhaps by calling insurance companies and switching to lower-cost insurers and by increasing your deductible (as long as you can afford to pay it, should you need to). You might resolve to eat out (or order food delivered) half as often as you currently do, and you might quit your gym, if you're not using it much or would be just fine switching your workouts to your home and local roads.

Along with spending less, aim to bring in more money. You might take on a part-time job for a while -- even a few years. Earning only $15 per hour for 12 hours per week will generate around $180 per week pre-tax, or more than $9,000 on an annual basis.

Alternatively, you might tutor kids online, sell crafts you've made (soaps, sweaters, bookcases), or do some freelance work. Try asking for a raise at your primary job, too -- or consider looking for a higher-paying job, even if you have to earn an extra degree or professional certification to do so.

As you save, be sure to make the most of tax-advantaged retirement accounts such as IRAs and 401(k)s.

4. Invest effectively

With all that money you're saving, be sure to invest it effectively. Savings accounts, CDs, and bonds are offering minuscule interest rates these days, so stick with stocks for any long-term investing. To beat the market, you'll need to invest in individual stocks or actively managed mutual funds, hoping to exceed the market's return. That may involve learning how to value stocks.

That's not the easiest path, though -- and your results may not be quite what you hoped. A great alternative approach is simply investing in a low-fee, broad-market index fund, such as one that tracks the S&P 500. It will instantly spread your dollars across hundreds of stocks and will have you roughly matching the returns of that index. So you won't beat the market -- but you'll meet it. With the stock market averaging close to 10% annually over long periods, there's no shame in just focusing on index funds -- and there are many good index funds out there.

Here are a few to consider:

5. Stick with your plan

Finally, one of the most important steps in this great and important endeavor of saving for retirement is sticking with it. You have a long-term plan, so be sure you don't give up on it like you might give up on a new exercise routine you tried to adopt. Saving and investing for your future isn't optional for most of us -- failing to attend to it can leave you struggling in retirement unnecessarily.

So start -- or continue -- building a more financially secure future for yourself. When you're in retirement and living comfortably, enjoying doing things you've long wanted to do, like traveling, you'll be so happy you were diligent about it.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.