How to Retire in Fifteen Years

Retiring in 15 years is ambitious, but with the right strategy, it’s possible if you leverage the power of total stock market index funds. These funds offer broad exposure to the U.S. equity market, low costs, and long-term compound growth. This makes them the perfect choice for anyone who wants to build wealth and retire in fifteen years.

What Are Total Stock Market Index Funds?

Total stock market index funds are mutual funds or exchange-traded funds (ETFs) that aim to replicate the performance of the entire U.S. stock market. This includes large-cap, mid-cap, and small-cap stocks. Examples include the Vanguard Total Stock Market Index Fund (VTSAX), Schwab Total Stock Market Index Fund (SWTSX), and Fidelity Total Market Index Fund (FSKAX).

These funds are passively managed, meaning they don’t try to beat the market—they try to be the market. This results in lower expense ratios, typically under 0.05%, which means more of your money stays invested and compounds over time. Lower fees = more money for you and less you have to invest to reach your goals.

Why Choose a 15-Year Time Horizon?

Fifteen years is a sweet spot: it’s long enough that you’ll benefit from compound growth, but short enough that almost everyone would be thrilled to have the option to retire within that time frame. To retire in fifteen years, you’ll need a high savings rate—typically between 50% and 70% of your income—depending on your desired retirement lifestyle and expenses.

Step-by-Step Guide to Retire in 15 Years

1. Determine Your FI Number
   Calculate your Financial Independence (FI) number. This is usually 25 times your expected annual expenses in retirement. If you plan to live on $40,000 per year, your FI number would be $1,000,000. One thing people sometimes forget to fully consider is that your expenses in retirement typically decrease. This means that your FI number may actually be less than you think!

2. Increase Your Income and Maximize Your Savings
   Increasing your income by negotiating your salary (and investing as much of this increase as you can) is the fastest way to increase your savings rate. The second fastest way is minimizing your expenses. The best way to hit your investing goals is to do both. It is easier to invest more when you make more.

3. Invest Consistently in Total Market Index Funds
   Invest in a total stock market index fund. Ultimately, what and how much of your investments you allocate to index funds will depend on your risk tolerance. The easiest way to hit your goals with minimal effort is to automate your monthly contributions to your 401(k), Roth IRA, and/ or brokerage accounts. Click HERE for a breakdown of the best order of investing to your investment accounts to maximize tax efficiency so you’re getting the most out of your returns.

4. Avoid Timing the Market
   Trying to time the market is a losing game. Instead, invest consistently and don’t overthink it. The beauty of index funds is that they’re designed for “set it and forget it” investing. Dollar-cost averaging helps smooth out market volatility.

5. Reinvest Dividends and Stay the Course
   Reinvest your dividends for compound growth. Over 15 years, reinvested dividends can account for a substantial portion of your total returns.

6. Track Your Progress and Adjust
   Use tools like Empower (a free net worth tracker) or a budgeting spreadsheet to monitor your net worth and progress toward your FI number. Adjust spending and investing as needed.

Financial Planning and Compound Interest Calculations

(THIS is my favorite compound interest calculator. Just plug in your numbers and go!)

The average annual return of the total U.S. stock market has historically ranged between 7% and 10% after adjusting for inflation. I recommend calculating your returns using 7% because when you adjust for inflation (typically ~2–3%), the real return sits around 7% per year.

Pro tip: As a shorthand, look to the rule of 72 which states that with a 7% rate of return, your money roughly doubles every 10 years (ok every 10.3 years but chill out math nerd).  

The Effects of Long-Term Investing and Compound Interest

Retiring in 15 years with total stock market index funds is realistic if you're willing to save aggressively, live below your means, and invest consistently. Time and compound growth are your best friends for early retirement.

I do want to note that this is an aggressive strategy and is not something that everyone has the ability to do. That is ok! If 15 years is too aggressive for you, plug in your numbers to see where you can be in 20 or 25 years. You’ll probably have more than you think!

Here is an example of how much money you would have after 15 years of investing in a total stock market index fund with a 7% average annual return with five different monthly investment amounts.

***Remember, 7% is the real return (i.e. it already factors in the effect of inflation). This means that the numbers above are adjusted for spending power in today’s dollars.