Retire or Die

Believe it or not, there will come a day when you simply stop showing up at work -- permanently. If you plan for it well, that day will come when you are able to spend the rest of your life with the people you love, doing the things you want to do. If you don't plan for it properly, though, that day may arrive only after you've reported for duty at the Great Cubicle Farm in the Sky.

Ultimately, your choices today affect which of those scenarios comes to pass. If you plan for your retirement exceptionally well from the beginning of your career, you might be able to retire comfortably from a regular investment that's as low as $155 per month. Wait until you only have 10 or so working years to go, and the monthly tab could shoot to around $8,000!

Gulp!
There's a simple reason the cost shoots up so high the longer you wait. Every day you delay planning for your retirement is another day that you lose the most powerful tool at your disposal: compounding. At a 10% return (roughly the market's historical average), your money doubles once every 7.2 years. In just over 43 years -- about the length of a career -- your earliest money can double six times over. If you have the time, it means that every $1,000 invested today can turn into $64,000 at retirement.

If you only have 15 years remaining (about two doubling periods), though, that same $64,000 will cost you closer to $16,000. That's a far more painful check to write, even if your salary has increased considerably.

Is there an easier way?
Unfortunately, there are no reliable shortcuts to building the kind of nest egg you'll need to retire comfortably. Sure, from time to time, even a multibillion-dollar company can double in size in a year. If you find and invest heavily in one, it can easily knock years off the time you need to build your nest egg. During the past year, these already large companies did just that:

The problem comes from the fact that, especially during short periods of time, you can't really predict where a company's stock will move. It stands to reason that if even a giant company's stock can double in a year if it fires on all cylinders, if things fall apart, the reverse can happen and its shares can plummet precipitously. In fact, during the same year that saw so many great companies skyrocket in price, these once-mighty titans have themselves fallen to Earth:

The risk you face in trying to find the next Amazon.com to fuel your retirement is that you may wind up with the next Office Depot. Both companies, after all, compete for your retail dollars. You would have been hard-pressed to find anyone a year ago who would have accurately predicted the actual stock performance of either firm. And without that perfect knowledge of the future, there's simply no way to always make the right call and profit from it.

Back to reality
What this means to you is that for your retirement plan to be successful, it needs to be firmly grounded in reality. That means realistic funding levels, reasonable return assumptions, and an investment strategy on a more solid footing than mere hope alone.

If you want your last day at the office to be one that you choose, develop a plan today. In his Motley Fool Rule Your Retirement service, my colleague Robert Brokamp can help you line up the pieces you need to build that plan with tips, calculators, model portfolios, and stock and fund ideas. To get started, join us today with a no-obligation 30-day free trial.

At the time of publication, Fool contributor Chuck Saletta did not own shares of any company mentioned in this article. Amazon is a Stock Advisor recommendation. The Fool has a disclosure policy.