How do I retire at age 40?

Retiring at age 40 can be achieved! Find out how you can make this goal possible.

Tutorial

If you do not own your own business that you can "retire" into, then this tutorial is for you. If you want to retire at age 40, we can show you how that can be achieved.

1. Save a Lot of Money

Everyone's situation is different, so no one model will work for everyone, but I wrote one that will work if you start at age 20. Whether or not this is even possible is up for debat, but here's the details:

If you started at age 20 making $30,000 and ended at age 40 making $101,763 (assuming average raises every few years with a promotion every 5 years) and saved 25% of your income each year, you would have just shy of $670,000 at age 40. This assumes an average investment return of 8%.

2. Reduce Your Need After Age 40

If you only withdraw $60,000 each year after age 40 and still have a return of 8% on your remaining investment, you will be able to live to age 70 before running out of money.

3. Make More Now, Save More, Retire at 40

Looking at this model, it shows you need to make more young, save more, and then you can be successful at retiring at age 40.

4. Retire Into Your Own Business

If you are able to, one of the better ways to reach this goal is to start your own business doing something you love. You can effectively "retire" into something you love doing and achieve this goal a different way.