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This is untrue in modern tech for most people. Let's attempt to break it down for a person who's single who wants to retire early: If you're pulling 100k or more, you should be more than capable, if you are living frugally, even after taxes, to save about 30-40% of that (if not way more. Remember that the median single person income is about $35,000, and the median family income, in total, is $75,062 [1]). The current wisdom is that if you are withdrawing no more than about 3-4% of your savings, you can expect, due to return on investment, your money to last about 30 years with 90% certainty [2]. This means that if you are willing to live on, say, $18,000 (fairly doable in many parts of the country where rentals are 600-900 a month), you only need a nest egg of 600k to begin a 30 year retirement in which you never make another dollar from working. To make this concrete: let's say after taxes and expenses, 30% of $100,000 is all you can reasonably save, due to the Bay Area being pricey and general life expenses. I personally don't think it's a major sacrifice to stash this much away, but let's run with it as an example. That's $30,000 you can sock away a year. This means to reach that 600k retirement figure, it should only take someone who starts saving for retirement immediately, 20 years to get there. And I would argue this is a VERY pessimistic assumption set as well, because the 3% number is meant to be a guarantee to survive HARD economic downturns, and the above analysis assumed you never received a bonus, never got a raise, never were awarded stock, never saved more, and never developed any income streams besides your job, despite being a programmer for over 20 years. Some analyses of doable salary increases programmers regularly get show you could pull this off in 8 years with my 30% estimate [3]. If you can, for example, increase your savings rate in my setup to 50%, you can have the above 600k based retirement within 12 years, in your mid 30s. Families obviously make this analysis more complicated, because of housing and the possibility of new income streams and drains, but assuming a two income family, I still would assert the fundamentals of the above situation haven't changed. So, in short, it very much is possible to retire in your 40s. You just have to live your lifestyle in a way that actually allows for that. [1] https://www.bloomberg.com/news/articles/2017-09-12/u-s-house... [2] http://time.com/money/4689984/safe-withdrawal-rate-retiremen... [3] https://danluu.com/startup-tradeoffs/ |