The old retirement playbook is cracking under pressure, and self-made millionaire Sam Dogen wants Americans to wake up before it’s too late.
Under the classic model, American workers were said to be able to rely on three major sources of income in retirement: Pensions, Social Security and personal savings. But for Dogen, who retired at age 34 and now runs the popular personal finance site Financial Samurai, that model no longer works.
Dogen, now 47, was able to walk away from his full-time job thanks to the passive income he built through investing and strategic savings. In place of the old “three-legged stool,” he built a new one that leans on self-reliance and diversified wealth-building.
1. Prioritize Tax-Advantaged Retirement Accounts
The first leg of Dogen’s modern retirement strategy still includes a classic tool: 401(k) plans and IRAs. Despite the shift away from pensions, he said these accounts remain essential.
“The first thing you should do is aim to max out your 401(k) and IRA or Roth IRA,” Dogen said in a CNBC article. “Hopefully, it’s something that becomes automatic, and you’re not going to touch it until you’re 59½.”
These accounts offer long-term tax advantages and can help your investments compound over decades. And if your employer offers a match, that’s essentially free money toward your retirement. For 2025, employees under 50 can contribute up to $23,500 to a 401(k) account and up to $7,000 to an IRA, depending on income limits.
But Dogen doesn’t stop there. He views tax-advantaged accounts as a foundational step but not the entire plan. Once you’ve maxed these out, he said, it’s time to build your own financial engine.
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2. Build Wealth Through Taxable Investments
After maxing out retirement accounts, Dogen turned to taxable investments to accelerate his financial independence. These include traditional brokerage accounts, real estate investments and other assets that generate income outside of retirement plans.
“Once it’s a given that you’re maxing out everything with tax-advantaged accounts, it’s about building those taxable accounts as much as possible,” he says.
Unlike 401(k) plans, these accounts aren’t subject to early withdrawal penalties, which gives you greater flexibility. Whether through dividend-paying stocks, capital appreciation or rental income, taxable accounts can create passive income that supports you before the standard retirement age (or simply takes pressure off your retirement funds).
If possible, Dogen suggests aiming for your taxable portfolio to double or triple the value of your retirement accounts by the time you reach age 60. That may be a stretch goal for many, but the principle remains: Invest more in assets you can access anytime.
3. Develop Your ‘X Factor’: A Side Hustle or Skill That Pays
The final leg of Dogen’s new retirement stool is what he calls the “X factor.” It’s a unique way to generate income outside of traditional employment or investing.
“You want to be working on something, either before or after work, that can eventually generate income,” he said. “It can be a side hustle. Or everyone has a skill — you can teach that skill to other people.”
Dogen’s own X factor was his Financial Samurai blog, which he started while working in investment banking. Over time, it became a meaningful income stream and led to book deals and speaking opportunities. He also taught tennis lessons in his youth which is another example of turning skill into cash.
While “work more” might not sound appealing to everyone, Dogen emphasizes that the right kind of work can bring both financial and emotional rewards.
“Not only [does it give] you tremendous security, but also tremendous satisfaction. Because you’re doing something you enjoy, you become an expert at it, and it’s fulfilling,” he added.
Why This New Model Matters
The shift away from pensions and the uncertainty around Social Security make it riskier than ever to depend solely on traditional retirement benefits.
Just 15% of private-sector workers had access to a pension in 2022, according to the Bureau of Labor Statistics. And without Congressional intervention, Social Security reserves could be depleted by 2035; potentially cutting benefits to 83% of what’s promised.
Dogen’s “new three-legged stool” offers a modern, more resilient framework:
- Tax-advantaged accounts provide long-term, compounding growth
- Taxable investments offer flexibility and early income
- Your “X factor” creates optional income streams that can adapt with you
The common thread? Ownership. Dogen’s model shifts the responsibility from the government and employers back to individuals which empowers people to build wealth and retire on their own terms.
Final Take To GO
Sam Dogen’s advice isn’t just for those chasing early retirement. It’s for anyone who wants to avoid being blindsided by broken promises in the traditional system. By saving aggressively, investing broadly and developing your own income-generating skill, you can sidestep the retirement pitfalls facing millions of Americans.
In today’s world, Dogen said, “You just have to count on yourself.” And with the right strategy, that might be the most reliable plan of all.
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This article originally appeared on GOBankingRates.com: I’m a Self-Made Millionaire: 3 Methods of Sidestepping Traditional Retirement Savings for Greater Wealth
