I would not normally advocate assuming you will have an early retirement, because you never know what your circumstances might be. But to answer your actual question, a fixed annuity would get you there, but it would be expensive because the earlier you want the fixed income payments, the more you have to pay and so to afford the fixed annuity, you would have to save save save. Invest in a diversified portfolio of both equities and some more conservative instruments.

Most importantly, be frugal and don’t accumulate debt.

Sincerely,
Young Einstein

OK, then. Go to one of the websites that has "How much do you need to retire" Then, put in the age you want to retire, and how much money you’ll want per year. The program will calculate how much you’ll need to save each year. Yahoo has several on the Finance Page.

I recommend, like the earlier poster, a 401(k) and/or IRA. You can save up to 20K a year using these tax shelters.

Retiring early is very difficult because: a) no Social Security, b) more money needed to fund a longer retirement, and c) less time to accumulate capital.

Save, save, save!

Put money into your 401(k) up to the amount of any match, then put the rest in a ROTH IRA (which will give you a tax-free stream of income in retirement).

I firmly believe in Dave Ramsey’s plan. Check out his website…

http://www.daveramsely.com

Ummmm – the "timeshare" comment is probably the WORST advice you could get. How would spending money on a vacation apartment help you retire.

Also, keep in mind that you will not have medicare if you retire early. Health care cost are probably your single biggest concern once you build up a good nest egg. There are many "well off" folks that put off retirement because of the fear of health care costs. It will only get worse in 30 years.

I retired from my full-time job at the age of 38 and now just work part-time from home. I definitely recommend early retirement to everyone. It’s great not having to work for others and picking and choosing work that inspires you, instead.

So how do you get to that point? Here’s a top 10 for you:

10. Manage your expectations. At 26, you can’t yet guess (even with web calculators) how much money you’ll need for retirement. You can decide to cultivate the pleasures of a simpler, less expensive life, which lets you retire earlier.

9. Get out of debt. You can’t really get serious about saving for the future if you keep sending all your cash to the credit card companies.

8. Guard yourself. Always make sure you have health insurance and an appropriate amount of car insurance to protect yourself against big expenses that could come about accidentally.

7. Learn from your mistakes. Nobody escapes their 20′s (or 30′s, or 40′s) without making some financial mistakes. Don’t beat yourself up for it and don’t make the same mistake twice. Do work your butt off to fix the mistake and get out of that hole you just dug for yourself right away.

6. Learn about money. Forget about options or real estate or picking stocks and focus on the basics, like the difference between saving and investing. You could read one book a year and be a genius before you’re halfway to retirement.

5. Work hard. Your greatest wealth building asset is your own income and you’ll find that the harder you work, the more of an income you’ll get over time.

4. Don’t fool yourself. You have to live on less than you make. You’re not going to win the lottery. The home equity line of credit is not the answer. You can’t borrow your way out of debt.

3. Be courageous. If you have a partner, mate, or significant other, be sure to learn together and to address any financial problems, plans, or disagreements early and openly. This can be very hard sometimes.

2. Now invest. Having cultivated the right attitudes, protected yourself against Murphy’s Law, and educated yourself, you’re ready to start investing.

There are a million mechanisms, but never do anything you don’t personally understand. Your work-based retirement fund, whether 401(k), 403(b), 457 plan, or other is a great place to start. I’m a fan of index investing for those who are just starting out because it’s easy to understand, easy to manage, and has very low fees. As you get a larger portfolio, you can add individual stocks if you like (I don’t), real estate if it suits you (not me), bonds as you age a bit (yuck), or other mechanisms. Stay away from cash value life insurance, whole live, universal life, annuities, etc. and learn why.

1. Start now. Compound interest is a mathematical miracle and you’ve got the great advantage of starting younger than most. I started at about your age investing about 10-15% of my income (at that time, low $20k range). I’m far enough along now to know that I’ll retire at about age 52 with somewhere in the neighborhood of $1.6M. The vast majority of that money came from the growth of my investments due to compounding, not from my own salary-based contributions. You can do this. Good Luck!

Excellent resources include Dave Ramsey’s books and podcasts, "The Wealthy Barber", and "The Richest Man in Babylon." Also, "A Random Walk Down Wall Street" will put your mind at ease with respect to getting started with investing using index mutual funds.