Save your way to $1 million

(Money magazine) -- Research shows that people who practice so-called burst saving are far more likely to sock away enough money for a comfortable retirement than those who don't.

According to a study by the research firm Hearts & Wallets, 64% of burst savers were able to build a nest egg equal to at least 10 times their annual pay, a common benchmark for a financially secure retirement.

They were also likelier than non-power savers to hit that goal no matter what age they started their savings regimen.

Says Laura Varas, a principal at Hearts & Wallets: "Once you've got a base of assets that really matters, it puts a tail wind at your back."

Part of a special report on How to reach $1 million, this story explains how saving aggressively for a decade can help you reach millionaire status by the time you retire.

KEY MOVE: Aim to save at least 15% of your income for a period of ten years or more.

HOW TO GET THERE

Get the timing right. Burst savers most commonly funded a ramp-up in their savings rate with money they received from pay hikes and bonuses, according to the Hearts & Wallets study. That way you don't feel the pain of living on less; you still take home more money, just not quite as much.

Power savers also often timed bursts to periods when their expenses fell or their income spiked. For example, many substantially increased contributions to their 401(k) or other retirement accounts after their children left home or during periods when both spouses were working.

Rein in your biggest budget busters. While small expenses do add up, it's not really buying daily lattes or the latest tech toy that most undermines your ability to save at a double-digit rate.

It's the really big bills, the five- and six-figure expenses like your home, car, and your kids' college education that ultimately do you in, says Leah Ingram, founder of the blog SuddenlyFrugal.com. "Getting serious about super saving may mean making some hard choices," Ingram says.

Case in point: computer programmer Scott Moore, 54, who's managed to build a net worth of $735,000 on an annual salary of $83,000.

Moore says the secret to his success has been keeping his housing and transportation bills low.

He bought a four-bedroom fixer-upper in an estate sale for $63,000 in 1995 and did most of the repair work himself. He's since paid off the mortgage and estimates the 2,700-square-foot house in St. Louis is now worth about $250,000. He owns a 15-year-old Buick Riviera with 154,000 miles on it and saves on gas and maintenance by mostly taking a train or bus to work and driving only when absolutely necessary.

The payoff: Moore expects to hit millionaire status -- $1.2 million to be exact -- by the time he turns 60 in six years.

Create multiple streams of income. Your salary can stretch only so far and you can cut expenses only so much.

Another way to supersize your savings is to supplement your main income with side work, says Christine Fahlund, senior financial planner at T. Rowe Price.

Deploy existing skills or focus on something you are passionate about, like fundraising, event planning, or launching a sideline catering or craft business.

"Turn your free time into cash doing something you enjoy and it won't seem like extra work," says Fahlund.

A bonus to this strategy: "The experience and skills you build up from consulting or project work now is an excellent way to transition to a flexible retirement career," Fahlund says. That way, you not only stay engaged as you age, but also get to keep adding to savings.

GETTING INTO GEAR

Set a target. Studies show that people who calculate how much money they need for retirement end up saving much more than those who don't. T.Rowe Price's retirement income calculator can help you access your number.

Develop new habits. Set a rule: Every time you get a bonus, tax refund, or other windfall, put half into savings. At irs.gov, you can elect to have your refund automatically directed into a savings account, IRA, or savings bonds.

Auto-escalate. Some 40% of employers allow you to automatically increase your savings rate each year, says Aon Hewitt. Raise contributions one point a year for five years, and you're twice as likely to save enough for retirement as those who don't.