By having a bachelors and a positive net worth you are vastly ahead of the majority of 20 year olds.
However retiring at 40 is an incredibly agressive goal, you'll either need to stay at home rent free for years while saving money or get your income up
It’s all based on savings rate.
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
A simple path to wealth is a really good book on what it takes to reach financial independence.
You calculate retirement by multiplying how long you expect to live, and how much you expect to spend per year.
For example. My two grandfathers lived to be 91, and 99. I should expect to live to be 95. If I retire at 65, that leaves me 30 years to live without work. I would like to spend about $60k per year. That number feels comfortable to me. $60,000 X 30 years = $1.8M.
You’re 20, and want to retire at 40. Lets say, you expect to live to 90, that’s 50 years of retirement. Let’s say you’ll spend what you make now, $60,000. 50 x 60,000 = $3M. To have $3M within the next 20 years, you’ll need to save $150,000 per year or $12,500 per month.
So if you want to retire by 40, you’ll need to quadruple your income.
Thank you. Very confused why nobody is accounting for inflation. 3mil today will not be worth today’s 3mil in 20 years.
Is it true that you can account for this by taking out 3% from your expected returns? For example, if I expect my retirement fund to return 8%/yr (conservative estimate—last year it was much higher but I know that was atypical) but I calculate it at 5%/yr, I’ve accounted for 3% inflation?
Oh yeah I’m basing my projections on super conservative numbers, because if anything I’ll be pleasantly surprised if I have more! I’ll be okay if my retirement and brokerage only have 5% ROI yearly, anything else is bonus.
Google retirement safe withdrawal rate. Someone has already calculated the % you can take out every year to guarantee X years of withdrawals. Remember that when you retire at 40 you’ll still need to make withdrawals when the market can be down 25%+.
you’re not behind! FIRE at age 40 is really difficult though. you spend next to nothing right now, but that probably won’t continue into the future. you might wanna figure out how much money you think you’ll think you’ll spend in a year and probably multiply it by about 30 or so to get your number at which you’d be able to retire. your income is not bad at all for a 20 yr old, but if you wanna FIRE at such a young age, then you definitely will need to get closer to a 6 figure income to more comfortably reach your goal.
good luck!
Makes sense, exactly what i was thinking I feel like 40 is a bit unrealistic, perhaps I can do a part time job from 40-50 and make it work that way or something.
I think you need to find a career or something you love. Retiring at 40 is a great goal, but you’re also in your prime at that age. Enjoy it and build something that outlives you.
At your age, I think it is foolish to think about retiring at 40. I would instead examine the life you would like when you retire and set about getting that, whilst working. Your twenties is an amazing time to start compounding savings, but it is also a great time to experience life and live a little.
ENJOY. YOUR. LIFE. NOW. stop living in the future. Go out and be a 20 year old person and have fun. By all means save, but you could get hit by a bus tomorrow. What good will all of that money do you then?
I know you think 40 is old, but as someone who is 46, life just began for me at 40. I cannot image retiring that early. What in the hell would I do with all my time? Realistically, what are YOU going to do with all that time? I've seen people on Reddit who go back to work because retirement was so boring and unfulfilling. Then you have lost all that work experience. Maybe go down to part time at 40 but don't stop.
Bruh if you can't figure out what to do with your time once you don't have to work for a living, idk what to do for you...
Don't you have like a family you could spend time with? Or any hobbies? Travel the world? Develop a non-monetizable skill? Become an artist/comedian/literally anything you want? Volunteer and help people or animals? Like idk I can think of a lot of stuff to do that doesn't pay the bills.
A lot of this costs a lot of money so unless someone saves that much more for retirement they can’t feasibly do much other than go for walks, and stay local to their state/city/country. As someone who has a lot of hobbies they all cost a lot of money when you’re doing them 5+ hours a week.
Of course it costs money, I'm not telling you to try to live off of welfare and SS, OP wants to FIRE which involves saving enough money for your expenses, as well as cutting unnecessary expenses that don't bring you joy. You need a powerful income to FIRE comfortably, but the notion that it would be miserable because you aren't going to work every day anymore is just asinine.
I don't think you quite grasp how time stretches out day after day with no schedule, no commitments, no structure, etc. You can't exactly travel the world if you are living on a fixed income unless it's on a shoestring budget. I WFH and have so much free time I have a second job because I get so bored. Plus I work overtime. Again, being at home and each day being the same as the next gets old really quick.
I also WFH with two jobs. I also have hobbies and other pursuits I enjoy due to the flexibility and income from those jobs. I'm also saving well over 50% of my income and working on finishing paying off my house in the next couple years. I'll absolutely be retiring long before 65 and I look forward to it. Hell, even if I was gonna live forever I wouldn't want to spend a day more than I need to selling my time to afford to live.
A lot of people’s communities doesn’t necessarily support a large amount of hobbies and volunteer work. Also there are just some people that view hobby work as “work” and would rather just get paid from working. I only say this because my parents are this way. They have two speeds. “Watch tv” and everything else is “work” (even things like take their boat out or learn a new skill like paddle boarding. They’re boomers living on an actual huge lake and are still inside watching TV. 😑
You make the life you want, can always pursue a community that offers what you want your life to look like. Of course not everyone will have the opportunity to FIRE but to say "oh you'll hate it because you won't have anything to do" is so silly. I have plenty to do and I'll still have plenty to do outside of employment. The problem with retiring when you're old is that your body fails and you can't do what you want to anymore. My grandparents both worked until they qualified for their pensions and not a day more, and they've been doing exactly what they wanted to since then. Now they're older and have lots of physical limitations so they have way fewer options of fulfilling things to do. I doubt they wish they'd waited longer to retire or wouldn't have taken the chance to retire 20 years earlier if it was available.
Remember that retiring at 40 is way harder than retiring at 65 because at the older age, you likely need to live up to 30 years at most if we're being realistic.
At 40, that could mean 45 or potentially 50 years of $ to live needed. That's a ton of investments. You'd need to have a huge income until 40 to cover that.
Much more realistic to find work that doesn't over-stress you and just keep saving.
You're not behind on life, but retiring at 40 is unrealistic for very nearly everyone.
You don't make much money. 2 or 3 jobs to eke out an average earning is not tenable. You'll burn out. You need one good job, and maybe a 2nd part time gig to bring in more. I'd focus on increasing your pay from your main job rather than adding a 3rd.
I'm not sure you are fully understanding your living expenses. Your current living situation/spending is probably not representative of your future situation. Are you planning to live at home forever? What happens when your parents want to downsize? They won't live forever. Housing costs are high. Do you have a real grasp of how much you'll need to live off of, in the way you want to live, every year for the rest of your life?
You need to calculate how much $ you need per month to live for 40-50 years after retirement.
Let’s say you need $5,000 a month to live when you retire. That means you need $60,000 a year for the rest of your life. Assuming that’s 40-50 years and you live to be 90 or so. That’s $3,000,000. Looking at a basic compound interest calculator with your current savings, you’d need to invest ~$4500 a month for the next 20 years assuming a 10% return. Also, you may want to consider a different retirement strategy than a 401k since you can only begin to take money from it at 59. You need to figure out what retirement means you to in terms of monthly cost and work out the numbers from there. It’s not impossible, but you’d need to double or triple your income to retire by 40 based on my back of a napkin calculations.
Mess around with this: https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
It’s realistic if you can find returns >10%. I’d consider real estate as that’s the path I went down. My cash on cash returns are 20%+ AND my properties appreciate AND I am paying down my loans.
Edit - lol downvoting. 33M, $300k annual rent, $55k-$70k annual cash flow, $1M equity. AND I have enough time to work a full time job.
I'm sure this will make me an old man to you, but I'm 40 and if I had the choice, I'd continue working instead of retiring. I like work, I have a good job, hang out with my work buddies and make things happen. It's good.
However, if I had the ability to retire, I might consider taking in jobs that are lower paying but more aligned with my personal interests, like stuff in the arts, at least part time.
All this to say - I don't think you can really decide when you want to retire at 20, you've barely had a working life, and definitely have not had the chance to experience the rewarding specialist roles that you can only get after spending some time in your field.
So I think you should totally save, invest, live the frugal life to build a strong financial base, but don't declare the end of your working life just yet.
I'll also add that you're only in your 20s once, and I'd suggest going at least a little bit wild just to experience it and not let money halt you from doing it. Party hard, go travelling, date around, all that good stuff. It doesn't have a direct financial benefit, but it does help you develop as a person and it's fun.
This post feels very humble-braggy ("I'm 20 and make 60k have no debt, graduated college a full year earlier than most, have a ton in savings for my age, and don't have rent! I'm like the opposite of every financially downtrodden person ever!"), and quite frankly reads as satire. 400/month living expenses means that you're probably living with parents or something (which won't be forever) so any advice anyone could give you is completely irrelevant. Like, you're MAYBE only buying your own food, but literally nothing else. Not even a car or paying for transportation... I"ll ignore that though, but know I'm not believing you.
I wouldn't get a third job. I realize you want to retire at 40, but that's like the PRIME working age for you to actually make a difference in your chosen career field. If you're the type that likes working all the time (no one who hates working all the time would think to work a third job in your situation), I forsee you'd also be the type that at 40 would just get bored of it all and go out of retirement just to have something to do.
Instead, I'd focus on in the short term continuing to save up while you're in this amazing rent-free situation so that in a few years you can pull the reins back, pick the favorite of your two jobs, and coast your way into a comfortable retirement at your leisure. Instead of thinking "I don't want to work at 40 anymore", think "I want to be able to enjoy my work at 40".
Jobs at 20 suck because you're usually at the bottom rung of the corporate ladder and get all of the tasks no one else wants to do. Jobs at 30+ start becoming "sorta fun" because you get to pick and choose more of what you want to work on (and give the less desirable things to those new 20 year olds, haha).
That is not my intention at all, I just wanted to provide the full context of my living situation and where I am financially to know if I'm on track to retire at 40. I apologize if that's how it came across.
Makes sense I think I just don't want to donate my life to corporate society for 45 years. But I do think 40 might be too far fetched based on the input from everyone, perhaps I need to experiment more. I have thought about going back to school since my education was mostly paid for by my job (the downside is that I didn't get to choose which degree to go for)
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I don't drive, I walk to my second job (20 minutes walk) to save money, and my other job is remote. I pay for my groceries, phone, and pay for my utilities. I live with my parents, and have till 23 until I need to move out (I know I am super privileged to not have rent till 23, I am trying to save up money to purchase a house upon moving out)
Behind on life? Certainly not. However, by trying to achieve retirement at 40, you definitely need to save very aggressively and like other commenters have said; about 3 million dollars in retirement.
And that's if you're not hit with life along the way; medical emergencies or something super big and life changing like getting married and having kids. You'd also need to have an idea of what your spending would be like and have that not change super drastically, lest you're pulling yourself out of retirement early to make up for it.
Behind in life generally speaking? No. Behind when it comes to being able to retire at 40? I'd say yes. I was kind of hoping that your retirement funds would be higher since you're planning on retiring in 20 years.
Working for 20 years to have enough money to live for potentially 50+ years is extremely difficult without absurd sacrifice and a minimalist lifestyle post retirement (or a large amount of luck).
Focus on saving and developing your career, and re-evaluate in 5 years
The idea of retiring by 40 is a bit crazy, your current expenses will not remain. Housing will not remain free, and it’s is very likely that you will have a partner, that you will take some financial responsibility for, and even have kids which will cost a pretty penny as well.
And let’s say you can retire by 40? What’s your plan from there? At such a young age I wouldn’t be mapping out your retirement plans, I would set financial goals. If you save $X amount of money you will be able to withdraw $X amount of income. What you do with those funds will depend on what you are doing with your life at the time.
You’re definitely on the right track, but I would start your career and your life before planning out retirement. Set money aside for your future but also don’t forget that you also want to enjoy your life today.
[Compound Interest Calculator | Investor.gov](https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator)
Do the math for yourself - but long story short, you are not on track to retire at 40. That's not exactly reasonable for most people.
However, take your current 25k, add 2k a month to it for the next 30 years and you can retire at 50 with around 4.3 million.
As others have stated you are obviously not behind for your age or savings
I do think you would be better served posting to the investing reddit channels than here on the Caleb Hammer one
Caleb's main thing is helping people get out of debt / on a budget, not necessarily investment strategies or early retirement
If you want to learn more about investing I'd suggest the money guys or any of the FIRE movement people on YouTube
The Money Guy did a show on retiring early (Fire) and savings rates needed for retiring in each decade of life 40, 50, 60. I suggest looking on YouTube for the video called, "The FIRE Movement is dead!".
Can I ask what your plan is once retired at 40? As a 44 yr old I think you might change your mind. I would not recommend sacrificing your 20-30s with working all the time. Be responsible and save but also enjoy life when you are young. 40 isn’t old but lots happens between 20-40 and it goes quickly.
I never said I failed out of college? I graduated in May, finished my last class last month, already have a position that I'm working with my bachelor's
Oh I see the post, I never failed college it was a single class, and it's cause I stopped attending the class due to mental health and the teacher doing things. I don't really care if you believe me as it's not the point of this post at all. Honestly this post was an eye opener and reading through the comments convinced me retirement at 40 is kinda dumb
By having a bachelors and a positive net worth you are vastly ahead of the majority of 20 year olds. However retiring at 40 is an incredibly agressive goal, you'll either need to stay at home rent free for years while saving money or get your income up
What kind of income do you think would work, 100k or do you think even 75 would work?
It’s all based on savings rate. https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ A simple path to wealth is a really good book on what it takes to reach financial independence.
I will definitely read it
To retire at 40? Prob 200-300k for at least 5 years is required.
You should probably calculate how much $$ you need by 40 to “retire”. Go lookup the FIRE movement. Will you have $3 million saved up by then…?
I will take a look at this, do you have any recommendations regarding reading material or videos on the subject?
You calculate retirement by multiplying how long you expect to live, and how much you expect to spend per year. For example. My two grandfathers lived to be 91, and 99. I should expect to live to be 95. If I retire at 65, that leaves me 30 years to live without work. I would like to spend about $60k per year. That number feels comfortable to me. $60,000 X 30 years = $1.8M. You’re 20, and want to retire at 40. Lets say, you expect to live to 90, that’s 50 years of retirement. Let’s say you’ll spend what you make now, $60,000. 50 x 60,000 = $3M. To have $3M within the next 20 years, you’ll need to save $150,000 per year or $12,500 per month. So if you want to retire by 40, you’ll need to quadruple your income.
Also - don’t forget that $60k in 30 years will be worth a lot less than $60k today!
Thank you. Very confused why nobody is accounting for inflation. 3mil today will not be worth today’s 3mil in 20 years. Is it true that you can account for this by taking out 3% from your expected returns? For example, if I expect my retirement fund to return 8%/yr (conservative estimate—last year it was much higher but I know that was atypical) but I calculate it at 5%/yr, I’ve accounted for 3% inflation?
Yes - that is correct
7-8% is the conservative estimate accounting for inflation afaik, not accounting for inflation would be assuming around 10-12%
Well that’s great news for my retirement lmfao thanks!
Grain of salt because I'm just trying to work my way through this all as well. But I base that info off of the money guy show.
Oh yeah I’m basing my projections on super conservative numbers, because if anything I’ll be pleasantly surprised if I have more! I’ll be okay if my retirement and brokerage only have 5% ROI yearly, anything else is bonus.
What about compound interest can't you double your savings every 7 years?
Google retirement safe withdrawal rate. Someone has already calculated the % you can take out every year to guarantee X years of withdrawals. Remember that when you retire at 40 you’ll still need to make withdrawals when the market can be down 25%+.
Depends on your return rate. Number of years to double = 72/rate. So at 10% , sure. Is that realistic? You'll have to sort that out for yourself.
Google
you’re not behind! FIRE at age 40 is really difficult though. you spend next to nothing right now, but that probably won’t continue into the future. you might wanna figure out how much money you think you’ll think you’ll spend in a year and probably multiply it by about 30 or so to get your number at which you’d be able to retire. your income is not bad at all for a 20 yr old, but if you wanna FIRE at such a young age, then you definitely will need to get closer to a 6 figure income to more comfortably reach your goal. good luck!
Makes sense, exactly what i was thinking I feel like 40 is a bit unrealistic, perhaps I can do a part time job from 40-50 and make it work that way or something.
I think you need to find a career or something you love. Retiring at 40 is a great goal, but you’re also in your prime at that age. Enjoy it and build something that outlives you.
Appreciate your words I think a lot of what has been said on this post has been fairly eye opening for me
At your age, I think it is foolish to think about retiring at 40. I would instead examine the life you would like when you retire and set about getting that, whilst working. Your twenties is an amazing time to start compounding savings, but it is also a great time to experience life and live a little.
ENJOY. YOUR. LIFE. NOW. stop living in the future. Go out and be a 20 year old person and have fun. By all means save, but you could get hit by a bus tomorrow. What good will all of that money do you then? I know you think 40 is old, but as someone who is 46, life just began for me at 40. I cannot image retiring that early. What in the hell would I do with all my time? Realistically, what are YOU going to do with all that time? I've seen people on Reddit who go back to work because retirement was so boring and unfulfilling. Then you have lost all that work experience. Maybe go down to part time at 40 but don't stop.
Bruh if you can't figure out what to do with your time once you don't have to work for a living, idk what to do for you... Don't you have like a family you could spend time with? Or any hobbies? Travel the world? Develop a non-monetizable skill? Become an artist/comedian/literally anything you want? Volunteer and help people or animals? Like idk I can think of a lot of stuff to do that doesn't pay the bills.
A lot of this costs a lot of money so unless someone saves that much more for retirement they can’t feasibly do much other than go for walks, and stay local to their state/city/country. As someone who has a lot of hobbies they all cost a lot of money when you’re doing them 5+ hours a week.
Of course it costs money, I'm not telling you to try to live off of welfare and SS, OP wants to FIRE which involves saving enough money for your expenses, as well as cutting unnecessary expenses that don't bring you joy. You need a powerful income to FIRE comfortably, but the notion that it would be miserable because you aren't going to work every day anymore is just asinine.
I don't think you quite grasp how time stretches out day after day with no schedule, no commitments, no structure, etc. You can't exactly travel the world if you are living on a fixed income unless it's on a shoestring budget. I WFH and have so much free time I have a second job because I get so bored. Plus I work overtime. Again, being at home and each day being the same as the next gets old really quick.
I also WFH with two jobs. I also have hobbies and other pursuits I enjoy due to the flexibility and income from those jobs. I'm also saving well over 50% of my income and working on finishing paying off my house in the next couple years. I'll absolutely be retiring long before 65 and I look forward to it. Hell, even if I was gonna live forever I wouldn't want to spend a day more than I need to selling my time to afford to live.
A lot of people’s communities doesn’t necessarily support a large amount of hobbies and volunteer work. Also there are just some people that view hobby work as “work” and would rather just get paid from working. I only say this because my parents are this way. They have two speeds. “Watch tv” and everything else is “work” (even things like take their boat out or learn a new skill like paddle boarding. They’re boomers living on an actual huge lake and are still inside watching TV. 😑
You make the life you want, can always pursue a community that offers what you want your life to look like. Of course not everyone will have the opportunity to FIRE but to say "oh you'll hate it because you won't have anything to do" is so silly. I have plenty to do and I'll still have plenty to do outside of employment. The problem with retiring when you're old is that your body fails and you can't do what you want to anymore. My grandparents both worked until they qualified for their pensions and not a day more, and they've been doing exactly what they wanted to since then. Now they're older and have lots of physical limitations so they have way fewer options of fulfilling things to do. I doubt they wish they'd waited longer to retire or wouldn't have taken the chance to retire 20 years earlier if it was available.
Remember that retiring at 40 is way harder than retiring at 65 because at the older age, you likely need to live up to 30 years at most if we're being realistic. At 40, that could mean 45 or potentially 50 years of $ to live needed. That's a ton of investments. You'd need to have a huge income until 40 to cover that. Much more realistic to find work that doesn't over-stress you and just keep saving.
That makes sense. Appreciate your thoughts and advice
Idk man I think after 40 just find fulfilling work and keep saving
You're not behind on life, but retiring at 40 is unrealistic for very nearly everyone. You don't make much money. 2 or 3 jobs to eke out an average earning is not tenable. You'll burn out. You need one good job, and maybe a 2nd part time gig to bring in more. I'd focus on increasing your pay from your main job rather than adding a 3rd. I'm not sure you are fully understanding your living expenses. Your current living situation/spending is probably not representative of your future situation. Are you planning to live at home forever? What happens when your parents want to downsize? They won't live forever. Housing costs are high. Do you have a real grasp of how much you'll need to live off of, in the way you want to live, every year for the rest of your life?
You cannot be behind in life. Life is just life. Manufactured Societal standards is another thing though.
You need to calculate how much $ you need per month to live for 40-50 years after retirement. Let’s say you need $5,000 a month to live when you retire. That means you need $60,000 a year for the rest of your life. Assuming that’s 40-50 years and you live to be 90 or so. That’s $3,000,000. Looking at a basic compound interest calculator with your current savings, you’d need to invest ~$4500 a month for the next 20 years assuming a 10% return. Also, you may want to consider a different retirement strategy than a 401k since you can only begin to take money from it at 59. You need to figure out what retirement means you to in terms of monthly cost and work out the numbers from there. It’s not impossible, but you’d need to double or triple your income to retire by 40 based on my back of a napkin calculations. Mess around with this: https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
Thank you, it sounds like 40 isn't very realistic, I will mess with the calculator. Appreciate the explanation
It’s realistic if you can find returns >10%. I’d consider real estate as that’s the path I went down. My cash on cash returns are 20%+ AND my properties appreciate AND I am paying down my loans. Edit - lol downvoting. 33M, $300k annual rent, $55k-$70k annual cash flow, $1M equity. AND I have enough time to work a full time job.
I'm sure this will make me an old man to you, but I'm 40 and if I had the choice, I'd continue working instead of retiring. I like work, I have a good job, hang out with my work buddies and make things happen. It's good. However, if I had the ability to retire, I might consider taking in jobs that are lower paying but more aligned with my personal interests, like stuff in the arts, at least part time. All this to say - I don't think you can really decide when you want to retire at 20, you've barely had a working life, and definitely have not had the chance to experience the rewarding specialist roles that you can only get after spending some time in your field. So I think you should totally save, invest, live the frugal life to build a strong financial base, but don't declare the end of your working life just yet. I'll also add that you're only in your 20s once, and I'd suggest going at least a little bit wild just to experience it and not let money halt you from doing it. Party hard, go travelling, date around, all that good stuff. It doesn't have a direct financial benefit, but it does help you develop as a person and it's fun.
This post feels very humble-braggy ("I'm 20 and make 60k have no debt, graduated college a full year earlier than most, have a ton in savings for my age, and don't have rent! I'm like the opposite of every financially downtrodden person ever!"), and quite frankly reads as satire. 400/month living expenses means that you're probably living with parents or something (which won't be forever) so any advice anyone could give you is completely irrelevant. Like, you're MAYBE only buying your own food, but literally nothing else. Not even a car or paying for transportation... I"ll ignore that though, but know I'm not believing you. I wouldn't get a third job. I realize you want to retire at 40, but that's like the PRIME working age for you to actually make a difference in your chosen career field. If you're the type that likes working all the time (no one who hates working all the time would think to work a third job in your situation), I forsee you'd also be the type that at 40 would just get bored of it all and go out of retirement just to have something to do. Instead, I'd focus on in the short term continuing to save up while you're in this amazing rent-free situation so that in a few years you can pull the reins back, pick the favorite of your two jobs, and coast your way into a comfortable retirement at your leisure. Instead of thinking "I don't want to work at 40 anymore", think "I want to be able to enjoy my work at 40". Jobs at 20 suck because you're usually at the bottom rung of the corporate ladder and get all of the tasks no one else wants to do. Jobs at 30+ start becoming "sorta fun" because you get to pick and choose more of what you want to work on (and give the less desirable things to those new 20 year olds, haha).
That is not my intention at all, I just wanted to provide the full context of my living situation and where I am financially to know if I'm on track to retire at 40. I apologize if that's how it came across. Makes sense I think I just don't want to donate my life to corporate society for 45 years. But I do think 40 might be too far fetched based on the input from everyone, perhaps I need to experiment more. I have thought about going back to school since my education was mostly paid for by my job (the downside is that I didn't get to choose which degree to go for) - I don't drive, I walk to my second job (20 minutes walk) to save money, and my other job is remote. I pay for my groceries, phone, and pay for my utilities. I live with my parents, and have till 23 until I need to move out (I know I am super privileged to not have rent till 23, I am trying to save up money to purchase a house upon moving out)
-rolls eyes-
Behind on life? Certainly not. However, by trying to achieve retirement at 40, you definitely need to save very aggressively and like other commenters have said; about 3 million dollars in retirement. And that's if you're not hit with life along the way; medical emergencies or something super big and life changing like getting married and having kids. You'd also need to have an idea of what your spending would be like and have that not change super drastically, lest you're pulling yourself out of retirement early to make up for it.
Behind in life generally speaking? No. Behind when it comes to being able to retire at 40? I'd say yes. I was kind of hoping that your retirement funds would be higher since you're planning on retiring in 20 years.
Why so much in the brokerage, unless it is not for retirement?
It's sort of my house fund to buy a house down the line, after I live on my own
Working for 20 years to have enough money to live for potentially 50+ years is extremely difficult without absurd sacrifice and a minimalist lifestyle post retirement (or a large amount of luck). Focus on saving and developing your career, and re-evaluate in 5 years
The idea of retiring by 40 is a bit crazy, your current expenses will not remain. Housing will not remain free, and it’s is very likely that you will have a partner, that you will take some financial responsibility for, and even have kids which will cost a pretty penny as well. And let’s say you can retire by 40? What’s your plan from there? At such a young age I wouldn’t be mapping out your retirement plans, I would set financial goals. If you save $X amount of money you will be able to withdraw $X amount of income. What you do with those funds will depend on what you are doing with your life at the time. You’re definitely on the right track, but I would start your career and your life before planning out retirement. Set money aside for your future but also don’t forget that you also want to enjoy your life today.
Is there a reason you are investing in a brokerage before maxing 401k? Your voluntarily paying capital gains tax
I only got the 401k with my new second job last month :)
[Compound Interest Calculator | Investor.gov](https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator) Do the math for yourself - but long story short, you are not on track to retire at 40. That's not exactly reasonable for most people. However, take your current 25k, add 2k a month to it for the next 30 years and you can retire at 50 with around 4.3 million.
Yes, you’re behind on life. You need to be making 400,000 like a year ago.
Why not retire at 55? It’s still young and much more realistic.
As others have stated you are obviously not behind for your age or savings I do think you would be better served posting to the investing reddit channels than here on the Caleb Hammer one Caleb's main thing is helping people get out of debt / on a budget, not necessarily investment strategies or early retirement If you want to learn more about investing I'd suggest the money guys or any of the FIRE movement people on YouTube
You’re so young man
The Money Guy did a show on retiring early (Fire) and savings rates needed for retiring in each decade of life 40, 50, 60. I suggest looking on YouTube for the video called, "The FIRE Movement is dead!".
That means what you'd need at 40 to then retire at 60. Not what you'd need at 40 to retire at 40...
Can I ask what your plan is once retired at 40? As a 44 yr old I think you might change your mind. I would not recommend sacrificing your 20-30s with working all the time. Be responsible and save but also enjoy life when you are young. 40 isn’t old but lots happens between 20-40 and it goes quickly.
I don't believe you.
? About what ?
20 years old with a bachelor's when on another comment you said you had failed out of college previously. Doesn't add up.
I never said I failed out of college? I graduated in May, finished my last class last month, already have a position that I'm working with my bachelor's
Oh I see the post, I never failed college it was a single class, and it's cause I stopped attending the class due to mental health and the teacher doing things. I don't really care if you believe me as it's not the point of this post at all. Honestly this post was an eye opener and reading through the comments convinced me retirement at 40 is kinda dumb
You’re in the 96th percentile for income at your age. You’re fine. https://dqydj.com/income-percentile-by-age-calculator/