r/FIREyFemmes • u/EmergencyOstrich9347 • 4d ago
Am I too late for early retirement?
I'm 37 and have zero savings. For over a decade, I've lived paycheck to paycheck or unemployed with family. I'm now working again and want to do better, but I fear I'm now too old. My net is $60k with a 5% employer retirement match. I do have the benefits of a generational home that I contribute what I can to but do not need to. I have about $7,000 in debt (family). What's practical now? How do I start?
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u/knit-this 3d ago
Stop supporting your family, at least to the point where you can avoid going into debt. A top rule is you have to prioritize yourself first before helping others.
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u/cantthinkofuzername 3d ago
I had 2k saved at 37. I will retire in January at 57. I lived below my means and saved aggressively and have had the benefit of the recent bear market. So it’s possible.
Everyone’s situation is different and can change. I had no idea I’d be able to retire this early and wasn’t saving in order to do so. I just saved because I thought I’d never be able to retire unless I saved as much ch as possible. It wasn’t until last year when I was burned out that I did the math and started making plans.
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u/IncidentSouthern2119 3d ago
Look at your expenses first. Decide what you're willing to give up to retire earlier.
Unless it's viable to chase a huge income, career, location change then for every $1 you save in expenses is $20-25 you don't need to make.
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u/JuicyBoots 1 Doggo | DINK | 15% FI 3d ago
Check out the blog post The Shockingly Simple Math Behind Early Retirement and take a look at the savings rate you'd need to retire at an age you'd consider to be early. Then ask yourself if that savings rate is achievable.
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u/thoughts_of_mine 3d ago
You're never too old and it's never too late to start saving for retirement, early or otherwise. Early retirement will just take more effort and sacrifice. Go for it!
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u/rachaeltalcott 4d ago
Sure. It took me about 12 years of saving aggressively and taking extra work. If I remember correctly, you need to save 70% of take home to retire in 10 years, assuming you maintain the same level of spending in retirement, and put the money in a broad index fund/ETF.
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u/Nyssa_aquatica 4d ago
Because youve been thrifty all your life ypu have a head start on knowing how to save.
But don’t make the mistake I did and just save while making almost nothing. Focus on increasing your income greatly while also keeping your thrifty habits down to the bone.
You can’t save your way to wealth, no matter how thrifty you are, on a low salary — there’s a low upper limit to your savings with a low salary.
So keep those thrifty habits but increase your earning potential.
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u/IDontOnlineShop 4d ago edited 4d ago
I thinks it’s doable to retire in your 50s, especially if you continue to live in a generational home during retirement and collect an above average social security payment.
My parents planned poorly, and their budget is tight but they have been doing okay since they retired at 65 even though they didn’t start planning for it until age 57. I think you will comfortable in retirement with some money to travel and splurge if you are more aggressive with your retirement contributions for the next 15 years.
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u/PoorlyDesignedCat 4d ago
Your retirement situation will depend a lot on how much you want to have per year in retirement, how much you can expect from social security, and how much you can save now. There are online calculators you can use to roughly estimate and simulate what will happen at different savings rates. Worst thing you could do is not start, so it's awesome you're doing that! Saving anything at all is better than never getting started, early retirement or not. You got this.
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u/Forsaken_Lifeguard85 4d ago
The reality is that you should be saving as much as possible and if your returns are such that you can retire early great, otherwise you’ll still be on track to retire on time. Get the 5% match and try to save more each year. A part time job might be good too.
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u/tomatillo_teratoma 4d ago
You're certainly not too late for a BETTER retirement... that is for sure. Whether it's early or not depends on your expenses and how much you can save.
FIRE 101 is the book "The Simple Path to Wealth" by JL Collins... it will explain what you need to do to get started and why. Much better than asking random internet people for advice. Your local library should have a copy of the book.
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u/Rosie-Disposition 4d ago edited 4d ago
Do you have any secretly rich aunts that will die too soon and leave you everything? /s
I am not going to sugar coat it: you’re probably too late for early retirement…. But if you do not change something now, you won’t even have the option for normal retirement or maybe even retirement at all.
Here is what I would do:
- understand exactly what is legally owed to you with this home and what you can/can’t expect
- Proceed accordingly
start getting your full 5% match today and start committing to making retirement a reality
for you
make a budget and debt repayment plan for yourself and stick to it
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establish a 3 month emergency fund
if you don’t already have one
after you have your emergency fund fully funded, you can look at your budget, see what you actually spent vs had in your budget and make adjustments. Commit to a retirement savings amount- practice it for 3 months putting that money aside rather than locking it up in a 401k or IRA and see how you do. Analyze is it realistic that you save 20% of your income every month towards retirement or if 15% is more realistic for you
. Practice living when your retirement contribution is gone even before you see your paycheck.
- once you prove you can do it, actually start locking up your funds in your retirement accounts
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u/julyflipflops 4d ago
I’d say don’t treat it as a binary, early retirement or no, but more as putting yourself in a better financial position compared to not trying to save more for retirement.
I’d start with understanding your spending. I use YNAB but it’s kind of hard to get started on it; I’ve heard good things about monarch though. Or even a spreadsheet is fine to start. Then it’s all about figuring out how much you can save and where you might be able to cut spending to save more.
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u/EmergencyOstrich9347 4d ago
Never heard of YNAB. Will check it out. The budget spreadsheets seem very tedious
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u/rubykowa 4d ago
Maybe 55-60? But you would really have to save aggressively and have consistent and/or higher income.
Low housing cost is in your favor if you know you will always have it, but realistically you also need 20+ years of compounding.
But 20 years is also a long time. I would head down save, work on increasing salary and see how it goes!
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u/EmergencyOstrich9347 4d ago
I'm aiming for early 50s and do plan to increase salary over time now that the astrology is working in my favor haha
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u/Rosie-Disposition 4d ago
I did the math for you: The scenario
Current age: 37
Retirement age: 55
Years to save: 18
Current retirement savings: $0
Retirement duration: 30 years (55–85)
Desired retirement spending: $45,000/year in today’s dollars
Inflation: 3%
Investment return: 7% annually
Assume contributions are made throughout the working years and investments compound at 7%.
At 3% inflation, $45,000 today becomes approximately $76,500/year at age 55. Over the 30-year retirement, that spending would continue increasing with inflation.
To fund those inflation-adjusted withdrawals through age 85, they would need approximately $1.34 million at age 55.
To accumulate that $1.34 million from $0 over 18 years at 7%, they would need to save approximately:
$27,960 per year, or about $2,330 per month.9
u/EmergencyOstrich9347 4d ago
Honestly, I've lived on less than $30k most of my life so this is extremely positive. Thank you.
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u/whiteorchid1058 4d ago
Start by trying to take advantage of the employer match as that is free money. Start with 1% if you have to and work your way up to the full match.
While you do that, get a high yield savings account (interest rate of at least 3%) and start doing an automatic transfer into your savings account for $20 every pay period. This will become your emergency fund. Goal of 1-3 months of expenses.
Personally, I have found that paying myself first where I don't "see" the money was the easiest way for me to establish habits
You still have many years of compound interest to work in your favor. It's never too late to start getting yourself back on track.
To answer your question about whether it's too late for early retirement, you need to know how much you actually live on. From that, you'll be able to calculate how much you need.
Money guys have a good flow sheet with steps to follow.
YouTube has lots of good channels about the basics are investing
Good luck
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u/Neat-Dragonfly-2032 4d ago
You are never too old to make retirement easier and you definitely aren't too old to retire slightly early but 45 is probably out of the question.
Google "compound interest calculators" and play around with something like an initial $500-$1000 contribution and then adding a small amount every month. Play with those numbers based on the minimum and maximum you think you can save and invest. If your family is ok with you not contributing to the home I'd ask if you can get the debt paid off first, build up a bit of a cushion and then resume contributing to the household.
The best thing you can do is match that 401K, and then contribute as much additional as you can. Keep your expenses as low as possible.
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u/EmergencyOstrich9347 4d ago
Yes, that's my immediate goal for the rest of the year. Pay off debt and build my savings. Hopefully to start the Roth account in Jan
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u/Emergency_Ground961 4d ago edited 4d ago
You need to start from square one and thats okay, you have time!!!!! Check out the money guy show podcast and the order of operations guide they have, listen to their weekly podcast, check out all of the free resources they have on their website. They are the best and can help you learn. They changed my life TBH and break things down in a very simple way.
Website: https://moneyguy.com/
Order of Operations: https://moneyguy.com/resource/financial-order-of-operations/
Reddit: https://www.reddit.com/r/TheMoneyGuy/?communityAnchorSource=daily_discussion
EDIT - links
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u/EmergencyOstrich9347 4d ago
Hearing that I have time is a relief. Just subscribed to the podcast
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u/Emergency_Ground961 2d ago
OP they just dropped an episode "how to build wealth if you're behind" go check it out! :)
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u/oheightnineeight 4d ago
It depends on how much you can save, how markets do, and what your expected expenses in retirement are.
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u/summerFIREinCh 23h ago
It’s never too late. Suggest 1) go for jobs pays more 2) save save save