How to Retire In 10 Years with No Savings

Despite having nothing saved for retirement, it’s possible to retire in as few as 10 years. Cutting living costs and saving aggressively can help many people build enough investment income to retire within a decade. TThis approach demands discipline, consistency, and a willingness to give up life’s extras — both now and in retirement. And it’s likely not for everyone. Talk to a financial advisor about your retirement savings plans.

Is It Possible to Retire In 10 Years with No Savings?

The traditional approach to funding retirement is to work for approximately 40 years and save about 10% of your income each year. During these accumulation years, you build a portfolio of risk-appropriate investments, preferably in tax-advantaged accounts. You stop working at around age 65 and rely on your investments, Social Security benefits and if you’re lucky, a pension. All in all, these sources should generate about 70% of your pre-retirement income.

But what if you’ve worked for decades and haven’t started saving for retirement? It’s possible to make up the savings gap in 10 years, but you’ll have to make some significant sacrifices now. This strategy calls for a combination of stringent restrictions on spending, outsized contributions to savings, conservative investments and a willingness to settle for a less-than-luxurious lifestyle in retirement.

Retiring within 10 years also requires a measure of luck, since events such as illness, accident, disability, job loss, economic downturns and other hard-to-foresee developments can derail the entire process and significantly delay retirement.

Retiring in 10 Years: Step by Step

How to Retire in 10 Years With No Savings

You can retire in 10 years even if you only earn an average annual salary, have nothing saved and won’t be eligible for Social Security or a pension. Here are the basic steps to follow:

1. Make the Commitment

The first step in preparing to retire in 10 years is simply deciding that you want to do it. The level of commitment and compromise this financial plan requires means it is not for everyone. Only someone fully dedicated to saving enough so they can retire in 10 years is likely to start the process and see it through.

2. Cut Your Costs

Assuming you want to go ahead, you will have to drastically slash your living expenses. This isn’t about skipping a latte or keeping your car a few extra years. It means making large, sustained cuts to spending. The idea is to live on just 25% or so of your income.

A 40-year-old American earning the average annual salary for people in that age group would need to cut their expenses to about 25% of $62,244 or $15,556 per year. That means making major changes like relocating to a low-cost area and downsizing your home, riding a bicycle or taking public transit instead of owning a car, shopping at thrift stores and maybe even growing some of your own food.

3. Save 75% of Your Income

This is perhaps the most difficult step. Saving 75% of your income will be extremely challenging, especially for people with families, but you’ll want to start by maxing out your 401(k), IRA and/or other retirement accounts.

In 2025, you can contribute up to $23,500 to a 401(k) and $7,000 to a traditional or Roth IRA. If you’re 50 or older, contribute the maximum catch-up amounts allowed by the IRS, which can supercharge your retirement savings. The IRS allows people 50 and older to save an extra $7,500 in their 401(k) and $1,000 in their IRA. Meanwhile, 401(k) account holders between ages 60 and 63 can save up to $11,250 in “super catch-up contributions” for a total of $35,750 in 2025.

After maxing out your retirement accounts, consider saving any extra cash in a brokerage account or even a health savings account (HSA) if you’re enrolled in a high-deductible health plan.

4. Invest Your Savings Wisely

An investment in a basket of large-cap stocks has returned approximately 10% annually over the long term. With a relatively short 10-year time frame, a more risk-appropriate option may be to invest in a diversified portfolio of stocks, bonds, cash and other assets and aim for an 8% annual return. Of course, Returns will vary depending on market conditions. For example, 2022 was a particularly rough year for investors, as the S&P 500 lost nearly 20% and Nasdaq fell by 33%.

Assuming an 8% annual return is achieved, after 10 years of investing approximately $45,000 per year, you will have a retirement nest egg of about $700,000.

5. Invest for Income

Now it’s time to stop working and live off the proceeds. There are many ways to generate income, many retirees use dividend-paying stocks to fund retirement. A typical portfolio of blue-chip dividend stocks pays about 3%. A 3% yield on $700,000 generates $21,000 annually — the amount you’d live on in retirement (in addition to Social Security). It’s not a lot, but it’s more than you’ll have been living on while you were working, so it should be adequate even after accounting for fluctuations in dividend yield over time.

The Downside of Retiring In 10 Years

The extremely spartan lifestyle required to retire in 10 years with no prior savings is a major downside. It calls for accepting exceptionally tight spending controls while working, and similar restrictions after retirement. A post-work life of travel, golf and cruises probably will not be part of this strategy. Only people who value financial independence over financial comfort are likely to be able to commit to it and succeed at it.

Retiring in 10 years also requires a measure of luck. Illness, accident, disability and unemployment are all potential unforeseeable events that could derail this strategy. It’s also not likely to be a viable option for someone who wants to have a large family, contribute financially to charity or leave behind a large legacy.

Bottom Line

Retiring in 10 years is possible even if you haven’t saved anything so far. However, it requires foregoing ease and luxury now and in the future in exchange for amassing enough assets to sustain a secure but minimally comfortable lifestyle. Still, extreme saving and cost-cutting can build a retirement-sized portfolio in 10 years — or possibly less, depending on your commitment.

Retirement Planning Tips

A financial advisor can help you invest to achieve your financial objectives. SmartAsset’s free tool matches you with financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
SmartAsset’s Retirement Calculator can supply more nuanced answers to questions including how much you may want to spend in retirement, when you can retire, how much you’ll need to contribute and how to account for Social Security and other factors.