Retiring rich is more achievable than you think. But you'll need a retirement plan, a willingness to save and invest a significant percentage of your income in the right accounts -- and time to put the power of compounding to work.

Here's a look at 20 strategies that can help you to retire wealthy -- or at least more wealthy than you otherwise would be. You don't necessarily have to do them all, but acting on a bunch of them can vastly improve your retirement. See which of the following ideas work best for you.

A green road sign with the words millionaire next exit.

These strategies can help you amass plenty of money for retirement. Image source: Getty Images.

Strategies for retiring rich 

  1. Get ready to build wealth
  2. Have a plan
  3. Live below your means
  4. Start saving and investing as early as possible
  5. Save aggressively
  6. Invest effectively
  7. Get raises and promotions -- or change jobs
  8. Teach your kids about money
  9. Make use of retirement accounts
  10. Don't cash out or borrow from retirement accounts
  11. Invest your raises and tax refunds
  12. Keep fees low
  13. Get a side job
  14. Downsize -- now or later (home and/or region)
  15. Keep up with your progress regularly
  16. Work for a few more years
  17. Get and stay healthy
  18. Maximize Social Security benefits
  19. Consult a financial advisor
  20. Keep learning

No. 1: Get ready to build wealth

First up, are you ready? Building wealth will require you to devote substantial sums to your future. But you shouldn't be doing that if you have unfinished financial business in your past (unpaid debts) and your present (an empty emergency fund).

There's little sense accumulating wealth in the stock market, where you might earn a long-term average annual return of 10% to (if you're lucky) maybe 15%,  while you're paying 15% to 30% in interest on debts. Pay off any high-interest rate debt before focusing on investing. Low-interest rate debts such as mortgages are less of a problem.

Also, be sure that you have an emergency fund stocked with six months' to a year's worth of living expenses, in case you suddenly lose a job or face steep medical costs or a major car repair.

No. 2: Have a plan

Don't just save and invest and hope for the best. Take some time to figure out how much money you need for retirement and how you will get it. It can help to think about the annual income you'll need or want in retirement, and then break out your expected income streams -- the ones you already have and ones you can set up. For example, if you determine that you'll need $60,000 annually in retirement, you might see that you will have $25,000 coming to you from Social Security, so you only need to come up with the difference: $35,000.

One rule of thumb is the "4% rule," which suggests that you withdraw 4% of your nest egg in your first year of retirement, then adjust for inflation in subsequent years, which is likely (but not guaranteed) to have your money last 30 years. If you want to generate $35,000 with the rule in your first year of retirement, you'd need $875,000. Here's a look at the initial-year withdrawals generated by various nest eggs, per the 4% rule: 

Nest Egg

4% First-Year Withdrawal

$300,000

$12,000

$400,000

$16,000

$500,000

$20,000

$600,000

$24,000

$750,000

$30,000

$1 million

$40,000

Data source: Author calculations.

Your retirement plan might have your income coming from dividend-paying stocks, annuities, and/or other possibilities.

No. 3: Live below your means

This strategy should be obvious, but many people seem oblivious to it. In order to be able to save and invest for retirement, you should be spending less than you make -- and definitely not trying to keep up with the Joneses. That's how you generate funds for investing.

That's easier said than done, but with a little determination and some savvy strategies in place, you can do it. Here are some ideas:

  • Seek discounts and use coupons.
  • Think about whether you've bought more house than you should have and whether downsizing would be worthwhile.
  • If you eat out a lot, do so half as often, and your savings can add up meaningfully over a year.
  • If you can carpool or use public transportation or a bike to get to work, you can spend less on fuel and car maintenance.
  • Think about whether you might cut the cable cord and just stream your video entertainment.
  • Check whether you're spending a lot in recurring expenses such as gym memberships and cable TV, some of which you don't even use anymore. If so, eliminate those.

Study your spending habits and you'll likely find a bunch of other ways to save.

No. 4: Start saving and investing as early as possible

The sooner you start saving and investing for retirement, the better. The table below shows what a difference even five years can make. (It features an 8% growth rate in order to be a little more conservative than the stock market's long-term average return of close to 10%, because that's not guaranteed.)

Growing at 8% for

$5,000 Invested Annually

$10,000 Invested Annually

10 years

$78,227

$156,455

20 years

$247,115

$494,229

25 years

$394,772

$789,544

30 years

$611,729

$1.2 million

35 years

$930,511

$1.9 million

40 years

$1.4 million

$2.8 million

Calculations by author.

If you're, say, 30 or 40 and you're thinking that you can just put off investing for a few years, the table shows that over the long run, you might end up with several hundred thousand dollars less in retirement because of that delay. That's not going to help you retire rich.

No. 5: Save aggressively

Once you start saving and investing for retirement early, be aggressive about it -- even if you're still young. If you can possibly sock away $5,000 per year instead of $2,000 or $3,000, it can make a big difference in the long run, since those dollars will have the most time in which to grow. If you're older and earning more, then sock away far greater sums, regularly.

The table below shows how much you might build over time by saving different, heftier sums than in the table above:

Growing at 8% for

$10,000 Invested Annually

$15,000 Invested Annually

$20,000 Invested Annually

5 years

$63,359

$95,039

$126,718

10 years

$156,455

$234,683

$312,910

15 years

$293,243

$439,865

$586,486

20 years

$494,229

$741,344

$988,458

25 years

$789,544

$1,184,316

$1,579,088

30 years

$1,223,459

$1,835,189

$2,446,918

Calculations by author.

Think about how many years you have left before you plan to retire. The fewer years left, the more you will want to sock away annually.

No. 6: Invest effectively

If you want to retire rich, starting early and saving aggressively aren't enough. You won't get to retirement very quickly by stuffing all that money in a coffee can. Similarly, in today's low-interest rate environment, savings accounts and CDs aren't likely to build much wealth, either. Over most periods, the stock market is the best way to build wealth for many people.

If you don't have the time, interest, or skill to study stocks and pick individual ones in which to invest, you're not out of luck. Just opt for a low-fee, broad-market index fund, such as one based on the S&P 500. It will instantly have you invested in about 500 of America's biggest and best companies, which together make up about 80% of the overall market's value.

Index funds tend to outperform other mutual funds, too. According to the folks at Standard & Poor's, for example, as of the middle of 2018, 84% of all domestic stock mutual funds underperformed the S&P 1500 Composite Index over the past 15 years. And 92% of large-cap stock funds underperformed the S&P 500.

No. 7: Get raises and promotions -- or change jobs

To retire rich, aim to earn as much as possible. Either ask for raises regularly at your job or consider changing jobs every few years. Studies have shown that you're likely to earn higher incomes by changing jobs regularly than by just getting raises at your current job. Better still, your next employer might offer better retirement benefits than your current one, perhaps via more generously matching your contributions.

You probably have more power to increase your earnings than you think you do. Nearly two-thirds of American workers have never asked for a raise, per a PayScale.com survey, and among those who did ask, roughly 70% got one.

No. 8: Teach your kids about money

This strategy may seem like a minor one, but it can make a major difference in your financial future. Most schools don't teach money management. If your kids grow up relatively clueless about it, they can end up needing a lot of financial support throughout their adult lives. Raise money-savvy kids, and they will likely be more independent --- and may even help support you!

As they grow up, share your financial life with them in age-appropriate ways:

  • Take them shopping with you so they see you comparison shopping, hunting for discounts, and using coupons.
  • Make sure they see you setting financial goals and working toward them -- perhaps for a family vacation.
  • Let them see you paying bills, so that they understand what things like electricity and housing cost.
  • Ideally, invest together, and then follow the companies in which you (or they) are invested and discuss their challenges and progress. (If you're only invested in index funds, just focus on companies of interest, to help them learn how businesses can struggle and grow.

No. 9: Make use of retirement accounts

Tax-advantaged retirement accounts, such as IRAs and 401(k)s, can help you retire rich if you make the most of them.

In a traditional IRA or 401(k), you contribute pre-tax money, reducing your taxable income and your overall tax bill. (With taxable income of $75,000 and a $5,000 contribution, your taxable income drops to $70,000 for the year. If you're taxed at 25%, you can save $1,250 on your eventual tax bill.) The money grows in your account, and when you withdraw it in retirement, it's taxed at your ordinary income tax rate at the time, which will often be lower than your current rate.

With a Roth IRA or 401(k) (and, yes, many employers offer Roth 401(k) accounts), you contribute post-tax money that doesn't reduce your taxable income at all in the contribution year. (Taxable income of $75,000 and a $5,000 contribution? Your taxable income remains $75,000 for the year.) But with a Roth account, your money grows until you withdraw it in retirement -- tax-free.

For 2019, the IRA contribution limit is $6,000 -- plus $1,000 for those 50 or older. The contribution limits for 401(k)s, meanwhile, are much higher -- $19,000 for 2019, plus $5,000 for those aged 50 and older. If your employer offers any matching funds, be sure to at least contribute enough to your 401(k) to max that out. After all, that's free money.

No. 10: Don't cash out or borrow from retirement accounts

Cashing out a retirement plan or borrowing from a retirement plan is a terrible idea if you're aiming to retire rich. Any money you remove from such an account, even temporarily, won't be growing for you. Imagine that you borrow $10,000 from a 401(k) for three years. In that time, it might have grown to about $12,600, at an annual average rate of 8%. By eliminating that growth, you lose out on $2,600. If you instead cashed out that $10,000 permanently, 20 years before retiring, you'd lose out on the roughly $46,000 that it might have grown to. Withdrawing the money early can also leave you facing a hefty early withdrawal penalty.

When changing jobs, remember that you can probably roll over your 401(k) into your new employer's plan -- or into an IRA.

No. 11: Invest your raises and tax refunds

Bank your raises and tax refunds as often as possible. You may not be able to live on your current salary without raises for the next 20 years, but if you can forgo many of your raises and move that money directly into retirement savings, it can give your growing nest egg a nice boost. It's the same with tax refunds, which often amount to several thousand dollars. A $3,000 tax refund that's invested and grows at 8% for you over 20 years can become about $14,000 -- a meaningful sum in retirement.

No. 12: Keep fees low

You face fees (often hidden fees!) all over your financial life -- in your investment accounts, bank accounts, mutual funds, retirement accounts, credit card accounts, and so on. Spend a little time taking inventory of them, and see whether you might switch to some lower-cost options. If you can pay 1 percentage point less per year on $100,000, you'll save $1,000 every single year.

Here's another way to look at it:

  • Imagine socking away $6,000 annually for 30 years and earning an annual average of 8% before fees. You'd end up with $734,075.
  • If you paid 0.25% in annual fees, though, your average return would be 7.75%, and you'd wind up with $699,623 -- about $34,450 less.
  • If you paid a whole percentage point in fees, your return would drop to 7% and your total would be $606,438 -- with fees eating up more than $127,000!

Review your bank statements to see what bank fees you're being charged, too. Some will even charge you an "inactivity" fee if you're not generating income for the bank in other ways, such as by depositing money regularly. On the credit card front, favor ones with no annual fee, unless you're getting more in rewards from a card than you're paying in fees. If you travel a lot, use a credit card with no foreign transaction fees.

No. 13: Get a side job

No matter how much you tighten your belt, there's a limit to how much you can save for retirement, as your income is probably limited. You can expand that income, though, by taking on a side hustle, at least for a while. Here are some ideas:

  • Drive for Uber or Lyft
  • Rent out space in your home via Airbnb
  • Become a tutor
  • Give piano, guitar, or voice lessons
  • Freelance as a singer, writer, editor, or designer
  • Make and sell things on Etsy

Think about what your talents are and what you might do. At the very least, just being a cashier at a local store can help you get to a richer retirement sooner. Earning just $12 per hour for an extra 10 hours per week can make you more than 6,000 extra dollars annually, pre-tax.

No. 14: Downsize -- now or later

Another way to turbocharge your retirement savings is to downsize -- either by moving to a smaller home or to a region with lower taxes or a lower cost of living. A smaller home can mean a lower mortgage payment and less money spent on taxes, insurance, maintenance, repairs, and utilities. Consider that the median home value in Massachusetts, for example, was recently about $405,800, but it was only $249,700 in Arizona and just $164,400 in Tennessee.

No. 15: Keep up with your progress regularly

This is a painless tactic, but it can help keep you on track to retiring rich: Regularly assess your progress. If you've invested in a handful of mutual funds, for instance, check to make sure that over the past few years, they've been outperforming the overall market. If they haven't, which is far from unlikely, you would do better to just move that money into one or more low-fee broad-market index funds, to approximately match the market's return.

Check your asset allocation regularly: If you want to have 80% of your assets in stocks and 20% in bonds, you may not have realized that over the past few years, your stock holdings have expanded to, say, 90% of your portfolio. In that case, you might want to shed some stocks and add some bonds.

Also, even stock investors with a buy-and-hold mentality still need to keep up with their holdings. Make sure they're performing well and aren't suddenly facing any long-term challenges, such as a new, deep-pocketed competitor or a scandal that could damage the company's future.

No. 16: Work for a few more years

Delay retiring for a few years to pursue a less painful path to a richer retirement. Doing so has multiple benefits:

  • It means that your retirement will be a little shorter and that your nest egg will have to support you for fewer years.
  • It will allow you to remain on your employer's health insurance plan, if one is offered, for a few more years, saving you a bunch of healthcare dollars.
  • If you put off starting to collect Social Security, you can get bigger benefit checks.
  • Most importantly, you'll have a few more years' worth of savings to contribute to your retirement coffers.

No. 17: Get and stay healthy

This may seem a weird strategy for retiring rich. But if you're not very healthy as you approach and enter retirement, you'll likely be spending a lot of money on doctor visits, test, treatments, medications, and possibly more. It's no secret that healthcare is expensive.

So, get as healthy as you can -- or stay that way, if you're already healthy. Eat nutritious foods and exercise regularly. Keep your blood pressure, cholesterol, and glucose levels as good as you can get them. Good health can make your retirement money last longer, and let you enjoy your golden years much more.

No. 18: Maximize Social Security benefits

The more you can get from Social Security, the farther your nest egg will take you in retirement. Fortunately, there are a bunch of ways you can increase your Social Security benefits.

For example, be strategic about when you begin collecting them. You can start receiving benefits as early as age 62 and as late as age 70. For every year beyond your full retirement age that you delay taking your benefits, you'll increase their value by about 8% -- until age 70. So, putting off from age 67 to 70 can leave you with checks about 24% fatter. Retire early, and your benefits may be up to about 30% smaller.

Despite that, it can still make sense to start early, because the system is designed so that people with average life spans receive roughly the same total benefits, no matter when you start collecting. Checks that start arriving at age 62 will be smaller, but you'll receive more of them. Most retirees actually start collecting at age 62. Other ways to increase your benefits include working longer, earning more, and/or coordinating Social Security strategies with your spouse.

No. 19: Consult a financial advisor

Saving and investing for retirement is a critical task that most of us need to do, and there's no shame in seeking professional help. After all, it can be intimidating and confusing, and it would be a shame for us to make costly mistakes along the way.

Go ahead and consult a financial advisor. Look for a good one recommended by friends, or find a fee-only one (who isn't compensated based on what he or she sells you) at NAPFA.org. Yes, they may charge you several hundred dollars or more -- but there's a good chance they'll save or earn you more than that. Keep the big picture in mind.

No. 20: Keep learning

Finally, keep learning -- by reading broadly and deeply about all kinds of personal finance and investing matters. Doing so can help you save money on all kinds of things, including insurance and mortgages, while helping your investment portfolio perform better.

If you can employ just a handful of the strategies above, you stand a good chance of significantly improving your financial condition in retirement. Use a bunch of them, and retiring rich may move more within your reach. Either way, you'll be glad that you ended up with more money.