Sat Jul 20 2024, by Tyler Gardner

How Creative Strategies Can Turn $2.5 Million into $10 Million for Retirement

Here is exactly how creative Tyler turns a $2.5 million retirement into a $10 million retirement. I'm Tyler, a former financial advisor and portfolio manager, and I create financial content for free to help you on your financial journey.

1. The Journey of Uncreative Tyler

Let’s say uncreative Tyler makes $250,000 a year in salary and an additional $250,000 a year in bonuses. He maxes out his 401(k), traditional IRA, and HSA. In doing this, he defers taxes on 6.83% of his salary. By doing this for 30 years, he will have $2.5 million of pre-tax retirement funds. Not too shabby.

2. Creative Tyler's Non-Qualified Option

But creative Tyler thinks a little differently about tax deferral. Bored with the typical qualified tax deferral options, he decides to pursue a non-qualified option. He creates a written agreement with his company to place $100,000 a year of his bonus into company stock until he retires. The company agrees to pay him 5% annually on this money, and Tyler still maxes out his other qualified accounts.

As a result, he now defers taxes on 26.83% of his salary and ultimately retires with over $10 million in pre-tax funds.

3. Living Off Interest

By deferring an additional 20% of his salary, creative Tyler now retires with confidence, living off about $800,000 a year in interest alone.

If any of this is helpful, please like and follow, and I’ll keep trying to get you one step closer to your financial goals.

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