The following may come across like I'm a starry-eyed newb, but you all know I'm not. Please humor me for a moment.
Let's say you're 40 years old, and have aspirations to retire at age 60. Here is a path. This is not new or novel, and is riddled with danger, and you certainly should not think this is a recommendation to do it. This is about taking a chance on yourself.
Step 1: Save $10,000 in a Roth IRA.
You can either contribute for 2 years, or if you're beyond the income limits, convert an existing 401k into a Roth.
Step 2: Self-direct the Roth via a custodian like Millennium, Advanta, Midland, etc. Select a futures broker and open an account there.
You are now 42 years old.
Step 3: Trade the account. Find one good trade every other week or so, and average 1% on those trades.
We've all done the starry-eyed "what if I double my account every month?!" nonsense. But let's talk about more conservative and realistic returns. Let's imagine that you are able to find 30 weeks in the year where you can add 1% to your account in that week. Some weeks you'll lose, some weeks you'll grow, but on average, you are able to have 30 weeks where you find a good enough trade (or more) to grow your Roth by 1%.
This gives an annualized return of ~35% (1.01^30). If you do this for 18 years, by the time you turn 60 and can take a qualified distribution, you will have $2.2M (10000 * 1.35^18).
Step 4: Withdraw $400K per year, tax free, and continue to return 20% per year.
The best part is that you pay no taxes. If you were to manage a relatively modest return of 20% per year, you can withdraw $400k every year, and maintain a $2M balance. Did I mention that you get $400K net? No taxes.
Some Q&A:
1) Why futures?
It doesn't have to be. If stocks are your thing, great! It's just that futures lets you start with $10K with no PDT nonsense to worry about.
2) Isn't this just like... well, a regular retirement scenario?
Sort of! Except that you are more in control of your fate. "It's suicide to try to time the market!" ... yes, for most people. But you are a trader, and a good one, right? Since the 2009 low, SPX has returned an average of 17% per year. That's phenomenal... but, the return from 2000 to 2013 was... 0%. And from the 2015 highs to the Covid low was basically flat. Yes, a 5 year return of .. about 1%. So, the market has not exactly had a smooth ride, and you were completely at its mercy if passively invested. Also, you can do better than 17% annually, can't you? We're going for 35%, right? If you think that the market in the next 10 years will return 100% every 18 months like the post-covid market, I think you're in for a surprise.
You can (and should) still passively be in the market, with a portion of your account! Passively being in the market over the past 18 months has netted a 100% return. That's phenomenal! Let's say you build your IRA to $50K. You want to have some skin in the game, so own MNQ or MES or whatever you like. The difference between this and a traditional retirement path is that you're not 100% all-in, and you can choose more actively when to have exposure, and you have more options on the exposure you want.
And by all means -- a "trade" doesn't have to be short term. Buy those dips, and hold them! But you now get to manage that position in a more granular way.
You may find that the market actually goes sideways to down at some point, and the long-only mutual fund traditional approach forces you to be in, or out (and in many cases, only in, as there are restrictions on buying back in more than once or twice per quarter). Maybe you want to (safely) sell premium on a sideways market. With a futures account (and the right broker), go for it!
3) Have you lost your mind? You sound like a newbie with this "35% compounding" nonsense!
Look -- the brilliant minds of the financial world have set up a system where you work your ass off, say "thanks" for a 12% annual …