How to Double Your Nest Egg

Kim Norton dutifully contributed to 401(k)-type plans for almost 20 years, routinely hitting the maximum contribution ceiling as she built a six-figure nest egg. But the aftermath of the tech bubble convinced her she’d need a bigger security blanket. So the Denver real-estate agent tore up the savings playbook; she started buying property with her IRA funds and flipping it to earn big returns. It’s more risky than traditional retirement investing, but Norton’s willing to take bigger risks for higher rewards—especially now that she’s resolved to build her savings to $2.5 million.

The current economic climate offers many reasons to be legitimately worried about financing retirement. Soaring fuel, food and health-care costs have reminded everyone how badly inflation can hurt a fixed income, and the ongoing credit crisis and the falling stock market have made investors realize how fragile a nest egg can be. But many people are still finding ways to throw their future a life raft. SmartMoney talked to several retirees and soon-to-be retirees who managed to double their retirement savings within an eight-to-10-year period. We examine two approaches below; for more, pick up the October issue of SmartMoney magazine.

Redefining the IRA