Pondering Over Early Retirement at Age 49, Possessing $1.3 Million in Investments, and Bearing $150K in Passive Income?
**49-Year-Old Reddit User Ahead of Retirement Savings Target**
A 49-year-old Reddit user, who is considering early retirement, finds themselves in a financially strong position compared to most people nearing retirement age. With a $1.3 million investment portfolio and an annual passive income of $150,000, this individual is well ahead of the typical savings curve recommended by financial experts.
According to Fidelity, by the age of 67, a person should have saved 10 times their annual income for retirement. This guideline is based on several factors, including saving 15% of income annually starting at the age of 25, investing more than half of savings in stocks, retiring at the age of 67, and maintaining the same lifestyle in retirement.
However, for the 49-year-old Reddit user, their savings likely exceed this benchmark. With $1.3 million in investments, this likely surpasses the 6x annual salary target that Fidelity suggests for someone of their age.
Moreover, having $150,000 in passive income significantly strengthens their financial position. This income can cover living expenses, reducing the reliance on investment withdrawals.
If the Reddit user invests $37,500 annually from their passive income and generates an 8% return, their savings could grow to approximately $6.6 million by the age of 67. This shows the potential for even more financial freedom later in life through compounding their savings over the next 18 years.
The Reddit user's current savings of $1.3 million exceeds the average 401(k) balance for their age group. The average 401(k) balance for people in the 45-54 age bracket is $168,646, while the median number is $60,763.
The individual's financial success is a result of smart investment decisions and hard work. They own two rental homes, which contribute to their passive income. The decision to retire early depends on several factors, such as their plans in retirement, exact income, expenses, lifestyle, investment returns, and inflation.
Professional investment advice and publicly available data can be used to evaluate the individual's financial situation. The Reddit user should consider keeping their rental properties to maintain valuable passive income.
It's worth noting that the Reddit user is a military retiree and also receives VA retirement benefits, which further strengthens their financial position. Even if their annual income is $250,000, they would easily have enough savings to carry them through retirement, according to Fidelity's recommendations.
The individual plans to "build that dream business, travel, and write more" in retirement. Their financial readiness, coupled with their plans, puts them in a very comfortable position relative to the typical target for someone reaching 67.
- The 49-year-old Reddit user, ahead of the typical retirement savings target, is focusing on personal-finance matters, such as investing their additional passive income of $150,000 to further enhance their finances.
- The individual's investment strategy, which includes their $1.3 million portfolio, not only ensures their retirement but also allows them to explore new opportunities like running a business, traveling, and writing.
- To maintain their strong financial position through retirement, the Reddit user might consider various investment avenues, including retirement plans like 401(k) or continuing to invest in real estate for steady passive income, given their current rental properties.
