How Much You Need To Have Invested To Retire At 35 

only 1 "frick" -- wow what self-control!!! LOL

To me, anyone that is EARNING money by DOING stuff every week is not actually RETIRED. I waited several years beyond when I COULD retire, wanting to make VERY sure that I would NEVER need to, say, work at Arby's if things went very wrong. I retired in 2007, and in 2008-2009 was very glad I had waited. The market recovered rapidly, but it looked UGLY for about a year there.

Is it realistic to believe people retire super early in their 30s or 40s and just do nothing at all that brings in income until they pass away?

@@ariefraiser140 I would say, no. I'm sure there are cases but generally, no.

well said, retirement shouldn't just be the end of work, but a transition to a fun life style that needs to be planned out too

😂 definitely not one take!!

I think for early retirement, however you may want to define it and at what age, the key is really preparing yourself for what you would to want to do on a daily basis once that day comes, at least 3-5 years before retirement. I am thinking about retiring in 5 years, so I am really these days thinking a lot about building hobbies, networks, and other useful and entertaining stuff-and, yes, even a part time gig that’s not done for money but just for fun or fulfillment-that can fill up my day after retirement.

I think it’s really important to find what your number is, because everyone has a different idea of what an early retirement, or what retirement in general look like. And what you want to look like is going to dictate what kind of number you can retire on.

@@ErinTalksMoney 100%. Early in my career, I just had an arbitrary number in mind, but as I approach my retirement, I am realizing that it really depends on what kind of a lifestyle I want in my retirement.

Also depends where you live, is your house paid off, are you trying to burn down to zero or leave money for kids, etc. It's the reason "can I afford to retire" is so complicated.

Same thing for me. On target to RE at 40. I've started calling it "freedom from the burden of economic output" Paid off house and a $1m portfolio should do the trick.

😂

​@@ErinTalksMoneyas great as this would be, don't do it. It could screw up your channels metrics and RU-vid could push it to the wrong people. ❤ awesome channel, I hope to do as good someday with mine.

Thanks for watching Tony! I use talk to text far too often and let me tell you, some of the things it says for me 😬 😂

perhaps you misunderstand the 4% rule.

@@hanwagu9967 Based on the Trinity Study published in 1998. The "4% rule" shows that you can withdraw 4% of any principle and adjust for inflation as you go. Given historical market conditions between 1925 and 1995 that withdrawal rate will allow the principle to last for 30 years. Perhaps the authors of the article referenced in the video misunderstood the 4% rule?

But there is inflation. So 100k a year living expense need to grow

@@Mobius_Pizza Nope - the 4% rule (or 3% if you want it to last more than 30 years) considers inflation. Year 1 you take 3% of principal - year 2 you take 3% + inflation from year 1 - year 3 you take the withdrawal from year 2 + year 2 inflation...and so on.

Glad you like them!

I think 52 is a wonderful early retirement age!! I hope you are living it up!

Thanks for sharing!

yeah, yeah, you joined the military and got military retirement pay eligible after 20yrs. The first part of your comment about inflation makes no sense, since the purpose of investing is to cover inflation and then some, not to mention your retirement pay has always been inflation adjusted. the second part about free time, means you haven't thought about the next step and what you actually want to do in retirement, which is why you lean on the excuse of the third part. The third part being you either need to still actually work or you need work to define you. Now it seems you need the work to socialize in your life, so there's nothing wrong with choosing to do so. However, just because you retire earlier doesn't mean your social pool gets older, it just means you aren't working to socialize. Presumably you will still carry over your interests in retirement, if you have interests outside of work, so your interest social pool doesn't mysteriously get older just because you retired earlier. Last, so what if your social pool becomes older? Presumably you are enjoying whatever common interests you share, chiefly you are retired. Here's a shocker: 42yo isn't 20s, so guess what? You are the creapy old guy who wants to hang out with 20 year olds if that is the socialization pool you are referring to. Once you get in your 40s, the active retiree pool is going to be 40-70year olds. Here's a second shocker: if you are mid-40s your work socialization group is going to be people in their 40-60s, unless again you are trying to be the old guy hanging out with 20yo coworkers. Having retired in early 40s, age of my socialization pool doesn't come up. You know why? Probably because we engage in and talk about whatever common interests center the social group, and not abou being 10-20yrs older or younger. Again, if you need to work for whatever reasons, that's fine, but just be clear the points you made are simply excuses for not retiring, not reasons to not retire.

Retired at 47 and am now 55. Totally agree with your main points of needing to find new interests and expand your friend group. Some of our friends can’t do stuff with us because they still are tied down with kids at home. Others we only see on the weekends due to work. Volunteer work is great, but does tend towards older folks and doesn’t completely fill the week. Good “problems” to have.

I guess it is based on the spending part, I used to make way more than I needed, but because I track every dollar I spent I know what spending amount per year or "income" I actually need.

I think you have an error in #1. Even if you are single, living in retirement on $30k to $60k may be tougher than it sounds. Health insurance is a big one. Money for hobbies and travel. Even if your home is paid off (which I certainly recommend) you still have insurance and taxes, ($5k to $15k). Heck, a decent used car every 5 years is still $5k/year, plus insurance and repairs.

Thanks for watching!

Haha

haha! 😂

www.ssa.gov/benefits/retirement/planner/AnypiaApplet.html

I have a Teleprompter, I’ve never filmed a video with it, because I didn’t like the way my eyes looked. Maybe one day I’ll actually use it. So for now it’s an outline and me talking to the camera.

@@ErinTalksMoney wow. How you do it is even more impressive! I would have to read a script to get all those words out correctly. Or stop every 15 seconds.

Thank you for your service! And I’m glad you are in a wonderful financial position!

seems you wouldn't be able to retire before 55, since you aren't 2nd pension eligible until then🤣 I'd say if you wouldn't be just fine living off military retirement pay, VA disability, and FERS something is seriously wrong with your finances.😂😂

How do you have a couple million in investments? Did you inherit wealth?

@@The.Harsh.TruthsI have about one million in investments now because I started at 18. I WILL have a couple million in investments by the time I retire because I invest a large percentage of my salary each pay period.

@@curtissouth916 I see. Yeah the broad market roughly doubles every decade, so I guess you’re assuming you’ll put away a lot of new money over the next 11yrs too.

Glad you like them! 😂 it’s definitely never a seamless as it looks!

Not even close to one take. 😂

That was wildly naive. You can withdraw the principal from Roth IRA with no penalty 5yrs after contributing. Also, with 401k you get company match and if you withdraw in old age, you’ll be in a lower tax bracket so you’ll pay less taxes. What you do is you max out your 401k and Roth IRA, but put the rest in IBAs. Then when you retire early, you draw from your taxable accounts until you run out exactly at age 59.5, THEN you start to draw from your 401k.

if you are getting SSDI, you didn't exactly step away.

The point of the 4% rule is to take half of what you're earning, so it still continues to grow to outpace inflation.

@@NotKimiRaikkonen Everybody cites the 10% number... that the stock market grows on average by 10%. Ignoring market timing... at 10% you should be able to safely withdraw 6-7% assuming long term inflation of 3%?

@@NotKimiRaikkonen pretty sure that's not the 4% rule.

@@logicae4096 the market doesn't grow linearly

Sure can! 😊

strippers don't work after 50

working isn't being retired

Yes, if you only have the minimum 40 quarters (usually 10 years) of eligible earnings, then the remaining 25 years will have zeroes. If you have a high earning spouse (or former spouse, if you were married at least 10 years), then a spousal excess payment may be added on top of your own benefit. There are so many factors, and they may be changing in the coming years as Congress tries to figure out how to make it so Social Security can keep paying benefits.

It’s not linear though, so I wasn’t surprised by her $1,800 estimate from the SSA website.

Sorry to pour cold water on this but they look at a total return which does include dividends reinvested. Even worse is you need to take health insurance into consideration when you "retire" which will generally bump up your expenses a lot.

@@darrenmatthews1667 Yeah healthcare is definitely an extra cost that needs to be accounted for. But for example, SCHD currently has a dividend yield of ~3.4%. If we take the example from that chart of retiring with $65k per year at 45, it suggests you would need $2.8M invested. But with SCHD, you would need 65000/0.034 = $1.91M. I know it's a simplified example, but that's what I was referring to.

@@KevinD21 You need to increase annually how much you get to cover for inflation. This is $65K that gets increase by inflation every year. Also, SCHD return isn't set in stone it can vary.

@@darrenmatthews1667 SCHD's dividend does increase each year, with most years being higher than inflation. You're right that it's not guaranteed, but historically has been much more steady than the stock market. For me, that is the biggest plus to this strategy.

Buy a dirt bike you'll never be bored again

I'd guess it's due to the huge risk and unknown of a 60 year retirement. Lots of opportunities for down markets and whatnot. The 4% was based on a 30 year retirement, so cutting that in half for a 60 year retirement might not be too crazy. I plan to have a 40 year retirement, and I'm estimating 3%.

you probably misunderstand the 4% rule

then you aren't retiring, you are just switching jobs. Nothing wrong with wanting to continue work full time or part time, but this whole retiring means working is tiring. Aside from saving/investing enough to retire, another big problem people have is choosing to actually retire out of fear of what retirement means to their identity. You can choose to be as busy or bored as you want in retirement. Take a look at Joe Kuhn and Azul Wells channels. Both talk about this, although Azul hasn't retired yet, but Joe has. My only add to what they talk about is that you don't have to have retirement life completely figured out before you retire, but it makes the transition easier if you have interests you will carry over. The important part is don't let work identity hold you back from actually retiring.

@@hanwagu9967 volunteering would be another option. You just need something to keep your mind active for your mental health. Minority Mindset just made a video about this.

That is one heck of savings rate!

I could not get past that section 😂

Inflation been crazy so suppose they are taking trinity study and adapting it with steroids given that it is saying you will be able to sustain that until your 90s. Agreed, though, most should consider taking it easier way before their 5 million if they can restrain their lifestyle in order to need to work less.

It honestly sounds about right. If you stop making money as soon as you hit that number. 5m buys you 50 yrs at 100k without being invested. Thing is, you'll want it to grow as well so you can maintain your lifestyle alongside inflation. Over 50 yrs, that could be 200k+ by the time you're 90. If you also want to take chunks to pay for let's say, kids college/cars/trips, you'll need to account for that too. Better to go out with extra in the bank account that scavenging around because you didn't prepare properly. I will say, most people won't do nothing after 35. More likely, they'll take a gap year or two and get into a lower intensity job and Coast so the 5m isn't necessary.

@@TheTrueHardcorefr3kwhat’s conservative is the rate of return

that’s 2% you could hold 100% bonds and get more than that