10 Steps to Retiring Young

9) Take Advantage of Free Money

This is a tip you will hear often when it comes to building an investment plan. Free money is what most people refer to as company sponsored 401K or pension plans. This is money that your employer will put aside for your retirement, and is typically free to you. For example, a popular company sponsored 401K may invest 50% of what you invest in a 401K, up to 6% of your income. This means, if you invest 6% of your income into a 401K account, your employer will invest 3% of your income. Over years, as your investments grow, and your salary grows, this 3% becomes more of an exponential growth than simply an additional 3% of your income.

Pension plans, while not as common as in the past, are now starting to see a bit of a resurgence as companies are moving away from the standard brick and mortar stores, to remote work, and passing on a lot of that overhead to workers in the form of bonuses, higher pay, and pension plans.