How I Went from a $100K Goal to a $1.9 Million Net Worth by Age 36 – Is Early Retirement Realistic?

Contemplating early retirement is something that everyone who believes in the idea of financial independence and the “retire early” movement should consider. It’s perfectly normal for everyone to want to set some financial goals they want to hit by a certain age, and if these goals happen to align with being able to walk away from the workforce early, that’s excellent news. 

In the case of one Redditor posting in r/Fire, there is no question they were one of these individuals who had some really strong goals for where they would be financially by the time they turned 30. Now that they are 36, they are able to look back at the goals they set when they were 21 and see how things stand with the goal of retiring around 55. 

The Dream

It’s perfectly normal for someone of 21 years of age to dream about where their life will be in 10, 20, or 30 years. To be fair, it would be more of a concern if someone wasn’t trying to plan for their future at a young age, especially one that involves fancy cars and retiring early with money in the bank. 

Setting a goal of achieving $100,000 in annual earnings isn’t all that lofty anymore, though maybe the idea of owning an Aston Martin by the time they turned 30 was. It really doesn’t matter what the goals were, just that they had goals and are now working toward them in a strong way that has helped them surpass initial expectations of where their life would be by this age. 

By the time the Redditor turned 30, they had achieved an annual income of $160,000, allowing them to check this goal off their list. They could even add new accomplishments with a $300,000 401 (k) amount, as well as one property they could call their own.

Fast forward to 36 years old, their income has dropped to $130,000 due to a job loss. However, they also have two properties and $880,000 split between 401(k) and IRA accounts. This, combined with their property, gives them a total net worth of approximately $1.9 million. The focus now is on retiring at 55 with a $3,000 mortgage, $3,000 in monthly expenses, and living the easy life. 

Unfortunately, the Aston Martin idea didn’t happen, as the Redditor now drives a 2005 Toyota Tacoma, but it’s far more fiscally responsible. 

Early Retirement Reality

Without knowing how much this individual is saving each month, it’s challenging to provide an exact answer on whether they can retire. We don’t know what kind of number they are focused on achieving by the time they turn 55, to determine whether a 4% safe withdrawal rate would be a good baseline or not. 

He does indicate that he is comfortable taking his foot off the gas a little bit on investing, but doesn’t want to stop working. There is also some pretty great self-awareness here in that he doesn’t want to feel forced into living a more frugal life than necessary, and he knows his current net worth is good enough that he can also live in the moment right now with some trips with the family. 

There is also consideration of three young children, ranging from 5 months to 4 and 6 years old, so there are additional college expenses and other associated costs that come with raising three children. Given all of this, we know the Redditor doesn’t want to be sitting around worrying about living off his children or having to scrape by on Social Security.

Growing Additional Wealth

Let’s say that the Redditor doesn’t invest another dime and just looks to have his $880,000 in 401(k) and IRA accounts grow. If this money is set aside for 19 years to retire at 55, while compounding at a conservative 6% return, it will grow into $2.6 million.

This translates to $104,000 gross at a 4% safe withdrawal rate when the Redditor turns 55, which far exceeds what he believes he will need to live on during retirement. The current estimate is around $72,000 for the mortgage and living expenses, which means he’ll be on track to retire early. At a 7% return, you are talking about $10,500 a month in returns, so more than enough to live on as well. 

Given everything we know, it seems that early retirement at 55 is a definite possibility, and this is even more likely if he invests just a little more over the next 19 years. 

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