Jill on Money with Jill Schlesinger Planning for Early Retirement
May 22, 2018
Ronnie, a 24-year-old recent college grad and budget analyst from Connecticut who still lives at home, calls in about retiring early. The conversation covers his income, aggressive saving strategy, Roth accounts and maximizing retirement contributions. Practical tips include using retirement calculators, building an emergency fund, and planning for part-time work in semi-retirement.
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Young Grad Already Maxing Roth IRA And Saving Aggressively
- Ronnie is a recent 24-year-old grad earning $58k who already maxes a Roth IRA and contributes 10% to a Roth 401(k).
- He lives at home to save, has no student loans and a paid-off car, and hopes to semi-retire early doing part-time work.
Use Calculators To Test Early Retirement Plans
- Use retirement calculators now to see how early retirement could work for you.
- Jill recommends free tools like Betterment's retirement calculator and paid software ESPlanner to model savings, contributions, and timelines.
Current Low Expenses Can Skew Early Retirement Expectations
- Early high savings rates can be misleading if current low living costs are temporary.
- Jill cautions Ronnie that living at home now makes projections optimistic; moving out with $1,300–$1,400 rent will change capacity to save.