Redditor Shares Journey To Saving $1 Million In Total Investments At 40-Years-Old
How much money should you have saved for retirement when turning forty? There’s no one-size fits all answer, but the rule-of-thumb suggestion from Fidelity is 2x your income, comfortably stashed in an investment vehicle where the money can earn compound interest.
Forty is so much more than a dreaded age where one’s metabolism starts slowing down and those scant gray hairs become harder and harder to cover up. Forty an important milestone to take stock of your retirement plan, your saving habits, and how you’ve managed to save (…or lack thereof) so far.
One Redditor recently shared their journey to saving $1 million at the age of 40 on the extremely popular r/financialindependence sub-Reddit. With a stated goal of Financial Independence, Retire Early (also known as FIRE), u/fireinlife laid out a playbook for how they managed to hit the two comma club after 19 years of working – including two years off to spend some of the savings on travel.
Unlike many FIRE posts with high six-figure income from jobs in tech or finance, this Redditor only recently broke a six figure salary.
The poster states they are single, with no children.
All things considered, this FIRE journey is significantly more realistic than many other FIRE journeys; notably for the lack of extreme frugality.
Key takeaways:
- Started in 2003 with a starting salary of $51,000
- Current 2021 salary of $102,790
- Low cost of living from buying a townhouse in 2005 for $183k, though market value has depreciated
- Bought a new F-150 truck with a career change.
- Took 30 months off from working with no contribution to investment accounts.
- Still traveling and splurging, but planning on saving more.
Stated breakdown of investments:
- Roth IRA: $216,639
- Company 401k: $126,554
- Rollover IRA: $509,739
- HSA: $78,810
- Individual: $72,309
Here’s how this c
My Journey to $1MM in total investments at 40 years old(even quit working for 2.5 years in the journey)
byu/fireinlife infinancialindependence
If nothing else, it’s an excellent road map at the importance of how to achieve your financial goals by living stingy.