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    As Early As Possible Retirement

    Hello,

    Currently I’m in college, so I don’t have a serious stream of income yet.

    But I was wondering if I wanted to retire some time say at like 35-40. How much would I need to I need to invest from, say 24 to 35-40 to secure a roomy retirement.

    I know you can only contribute like 7.5k to IRAs, but I know there’s also this thing called mega back door though I’m unsure how that works.

    My parents are very nice so my necessary expenses are low, so I’d like to focus on saving as much as possible.

    I know this is like a very unrealistic and hypothetical question, but just wanted to see.

    Thank you, and hope yall have a good day.

    As Early As Possible Retirement
    byu/WESTWOODLAPTOPTHIEF inpersonalfinance



    Posted by WESTWOODLAPTOPTHIEF

    6 Comments

    2. DeluxeXL on

      Read the table in [this article](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/). You’re looking at retiring after 16 years, so you need to save 55% with no help. You may also need to be more conservative on the withdrawal rate, and save even harder.

      “With no help”: the table assumes your expenses stay the same (after adjusting for inflation) now, in the future, and in retirement. Hence, if you’re relying on parents now, count their support as a part of your income when calculating the dollar amount to save each year.

    3. josh_josh_josh_ on

      You should play around with a compound interest calculator to see how the inputs impact retiring in 15 years.

      You can mostly control your
      – salary
      – years in the market
      – savings rate
      – rate of return (not really controllable beyond normal ranges)

    4. GeorgeRetire on

      If you want a 50+ year retirement you’ll have to save a lot of money in 11-16 years.

      Start by estimating what you want to be able to spend annually in retirement.

      Multiply that by 35 or so.

      That’s the size of the portfolio you will need to have properly invested when you retire.

      Then divide that by 15 or so.

      That’s how much you will need to save each year from age 24 to early retirement.

      Good luck.

      (I always find it funny when someone who hasn’t even started working yet focuses on retirement)

    6. katie4 on

      25x your annual expenses would historically last you at least 30 years of retirement. If you spend 50k per year on needs and wants, you would need 1.25m to last you 30 years. That is for a typical retirement at ~65 to last you 30 years until presumed death at ~95. If you plan to retire early and need to be supported for a lot longer than 30 years, you may want more like 35x your annual expenses. If you can live off of 50k you may want 1.75m invested. If you can only live off of 100k, then you will need more like 3.5m invested. Also, if you retire very early you will likely not be able to get much from social security in your elder years, so you really need it already tucked away. Don’t forget the cost of health insurance without a job and before you qualify for Medicare, this puts a wet blanket on a lot of peoples’ early retirement plans because costs of insurance in the US are insane.

      Firecalc.com

      Don’t just think in IRAs, also be sure to invest in your 401k through work. You can contribute up to 24.5k pre-tax from your paychecks. Lots of employers also will match a few percent too, giving you free money.

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