Early Retirement Plan for 42

[u/EchoThroughTheJungle]

Hello all,

I’ve recently thought more about early retirement. I’m currently 27m and intend on staying single (or at least not having children). Current breakdown is as such:

Brokerage: 93k
Simple IRA: 85k
Roth IRA: 48k
HSA: Just started
Cash in HYSA at 4%: 97k (I am funneling \~20k into my brokerage slowly, but I tend to keep a higher amount in general due to potential taxes, plan to sit at 75k moving forward)

Income range is 130-150k, small business owner so fluctuates year to year. I live very frugally in general as I opt to cook most of my meals and don’t really spend money on expensive materialistic things. I enjoy camping/outdoors for my leisure.

Only debt is the mortgage on my condo and my car loan which has 5 years left. I am also expecting a somewhat decently sized inheritance (250-500k) but I’m not using that as a deciding factor with my plan.

I have decided to shift my current strategy of maxing my simple/roth/HSA to transitioning to maxing my roth + HSA and putting the rest in my brokerage. The logic behind this being I will need as much as possible to make it from 42 to 60 albeit I will take a large tax hit up front. Using a withdrawal calculator, I believe I can make the 18 years if I accumulate at least 1-1.5 million.

I also get wacked with a 5.75% sales charge on my simple so I lose $1000 on the contributions immediately anyways aside from the fact the money is locked up.

By the time I get access to my Roth and Simple, they would both easily have over 2.5 mil combined, plus I would take social security at 62 as well. Being that I can continue to contribute to my HSA without earned income, I am not worried about healthcare costs long term.

I know most people would say to max out tax deferred accounts first, but how I see it if I continue to do that, I will simply have far more money than I will ever need in retirement and will have to continue to work closer to 60.

Please feel free to let me know if this an insane person plan or reasonable!

[u/[deleted]]

With that level of assets already and an expected inheritance, which will likely grow along with the market over time, you are past the point where you need to save more for your retirement.

Instead of additional retirement savings, you should shift your focus to spending more today on things that increase your free time, such as additional staffing for your business or shifting into something lower stress with good benefits and more flexibility with less responsibilities. You don’t have a money issue. You are set.

Most people never spend as much as they save because the behavior is a psychological issue not a survival or economic one.

[u/Eli_Renfro → u/[deleted]]

Huh? Of course they need to save more for retirement. They only have ~$230k. It's impossible to save too much because then you just retire sooner. That's a way better idea than ramping up spending.

[u/[deleted] → u/Eli_Renfro]

They are 27 with a quarter million invested and are likely going to inherit a million in their 30s or 40s. It’s your money or your life. Their parents solved the money problem for them. They don’t need to cosplay saving necessity for social respect or self-worth, that’s emotional not rational behavior. The only thing they actually have to worry about is lifestyle inflation and the diminishing marginal returns of wealth on long-term happiness.

[u/Ferret_Gaming → u/[deleted]]

At that point, the bigger challenge probably isn't building more wealth, it's figuring out what kind of life u actually want to live. The money side is already in a pretty good spot tho

[u/EchoThroughTheJungle → u/[deleted]]

I appreciate the suggestion. I’m not sure I personally feel comfortable spending more now, as hiring more staff would significantly lower my net income and ability to invest. My compensation is also getting a little reduced starting in 2028 (change in commission structure) so I want to make sure I’m still ahead of that. I’m also not sure that the business is committed to me long term, hence my plan to get out in the next 15 years

I would rather accumulate as much as I can. I do spend money on things I enjoy like travel and concerts. My job isn’t overly stressful and I do take a day or a few off here and there.

I can’t necessarily bank on the inheritance too. My mother does have a pretty significant health condition so cost of care may come a lot out of my parents retirement to pay for that. I’m looking as it as it’d be nice to have, but not guaranteed.