Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
24 and I want to retire early
Old 01-20-2008, 01:00 PM   #1
Confused about dryer sheets
 
Join Date: Jan 2008
Posts: 2
24 and I want to retire early

Hello everyone.

I'm 24 years old. I graduated college in August and I already want to retire. Haha.

Currently, I am set to deposit ~$7000 per year into a 401K. That amount will probably increase by 2-3% per year, but I can't say for sure.

Also, I'm saving ~$200/month to invest separately from my 401K.

I would like to retire after 20 years in the workforce, but I don't think this will be enough money to do so.

How much more should I be investing per month?

Thanks for all the help.

Also, my current 401k is with T. Rowe Price. Here is the allocation of my investments. I need help with this because I am a beginner.

Capital Appreciation Fund (PRWCX) - %20
Growth Stock Fund (PRGFX) - %30
International Growth and Income - %10
New Horizons Fund (PRHNX) - %10
Retirement 2045 (TRRKX) - %30

Other funds that I can choose from are:

New Income Fund (PRCIX)
Retirement Income Fund (TRRIX)
Short-Term Bond Fund (PRWBX)
Summit Cash Reserves Fund (TSCXX)
Value Fund (TRVLX)

There are several other funds set to your expected retirement date (e.g. Retirement 2045, which I am in already).

What changes should I make?
__________________

__________________
whitepepper is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-25-2008, 02:13 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Somewhere out there, there's an article that has the math for retiring in 20 years. It's something like, "Save 20% each year and you'll be able to retire in 20 years."

As for how much additional you should save, it all comes down to how much you spend now and how much you plan to spend.

Don't forget to have some fun. Save some each month for an exciting vacation.
__________________

__________________
eridanus is offline   Reply With Quote
Old 01-25-2008, 02:22 PM   #3
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 2,405
Quote:
Originally Posted by eridanus View Post
Somewhere out there, there's an article that has the math for retiring in 20 years. It's something like, "Save 20% each year and you'll be able to retire in 20 years."

Here's one version:

Millennium Edition Generation-X Retirement Calculator.

2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 01-25-2008, 09:27 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
pepper, I think you have reasonable funds for your age. I don't have a lot of good choices in my 401k, so I put all my contributions into T Rowe Price Capital Appreciation, which has an enviable track record.

At your age, I wouldn't get hung up on a specific date. There ae so many unknowns ahead of you that all you can do is save as much as you can without ruining your standard of living andtrust to providence. You've no way of knowing what your returns will be, how quickly your earnings will increase, whether youwill getmarried and have kids (which are expensive), etc. You also do not want to miss out on life while you are saving. After all, you could get hit by a bus next year. What if you never went to Europe/Asia/Galapagos/Topeka because you were saving for retirement? What if you never got the chance to sky dive/hike the Appalachian Trail/smoke crack because you were saving for retirement? So Ithink the best way to go about all of this is to set a budget, stick to it so that you cansave, and enjoy your life.

You will no doubt get all kinds of stories from the old salts here if you ask or search, but a bit of perspective: I started saving when I was your age, starting out with zippo and a couple of car loans. At age 34, I am looking at the prospect of being able to retire somewhere between age 40 and 45 even though I am the sole breadwinner for a family of 4 and my investing lifetime included one of the biggest equity market crashes in US history (tech bubble popping) and the biggest real estate downturn since the Depression. So save your pennies, enjoy life, and you will get there sooner than you expect.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 01-26-2008, 12:22 PM   #5
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,619
Quote:
Originally Posted by whitepepper View Post
What changes should I make?
Welcome to the board, WP, and here's some suggestions:

1. Educate yourself (more than you already have). Read this board's "Best of" and the FAQs for an overview, and then dig into something like Bob Clyatt's "Work Less, Live More" or Bernstein's "Four Pillars" or "The Boglehead's Guide" or another of this board's recommendations.

2. Have you run FIRECalc on your spending and your portfolio?

3. Have you examined your spending to see what gives you value and what doesn't give you so much of it? It's easier to reduce your spending than to raise your income, but it's also important to make the reductions in a way that encourages your progress instead of crossing the line from "frugality" to "deprivation".

After you've done the above then you can develop your preferred asset allocation, analyze the best funds available for meeting that AA, and, incidentally, fully fund your Roth IRA.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 01-26-2008, 02:00 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 7,440
Quote:
Originally Posted by whitepepper View Post

Capital Appreciation Fund (PRWCX) - %20
Growth Stock Fund (PRGFX) - %30
International Growth and Income - %10
New Horizons Fund (PRHNX) - %10
Retirement 2045 (TRRKX) - %30

Other funds that I can choose from are:

New Income Fund (PRCIX)
Retirement Income Fund (TRRIX)
Short-Term Bond Fund (PRWBX)
Summit Cash Reserves Fund (TSCXX)
Value Fund (TRVLX)

There are several other funds set to your expected retirement date (e.g. Retirement 2045, which I am in already).

What changes should I make?
The biggest chunk of my IRA is in PRWCX. Great track record. But at your age, why not just go with Retirement 2045? An all in one fund that will become more conservative as you age.

T. Rowe Price
__________________
Retired 3/31/2007@52
Full time wuss.......
Dawg52 is offline   Reply With Quote
Old 01-27-2008, 03:38 PM   #7
Confused about dryer sheets
 
Join Date: Jan 2008
Posts: 2
Thanks for the responses. I will definitely be reading up the FAQs and threads on this board.

Dawg52, I was thinking about doing that to keep things simple. That fund would probably cover my after 62 retirement income. It is more the before 62 retirement income that I'm worried about.
__________________
whitepepper is offline   Reply With Quote
Old 01-27-2008, 04:15 PM   #8
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
Quote:
Originally Posted by whitepepper View Post
Hello everyone.

I'm 24 years old. I graduated college in August and I already want to retire. Haha.

Currently, I am set to deposit ~$7000 per year into a 401K. That amount will probably increase by 2-3% per year, but I can't say for sure.

Also, I'm saving ~$200/month to invest separately from my 401K.

I would like to retire after 20 years in the workforce, but I don't think this will be enough money to do so.

How much more should I be investing per month?

Thanks for all the help.

Also, my current 401k is with T. Rowe Price. Here is the allocation of my investments. I need help with this because I am a beginner.

Capital Appreciation Fund (PRWCX) - %20
Growth Stock Fund (PRGFX) - %30
International Growth and Income - %10
New Horizons Fund (PRHNX) - %10
Retirement 2045 (TRRKX) - %30

Other funds that I can choose from are:

New Income Fund (PRCIX)
Retirement Income Fund (TRRIX)
Short-Term Bond Fund (PRWBX)
Summit Cash Reserves Fund (TSCXX)
Value Fund (TRVLX)

There are several other funds set to your expected retirement date (e.g. Retirement 2045, which I am in already).

What changes should I make?
My IRA is with T Rowe. I question why you would use 2045 and other funds. Here is what I would do-

Learn about asset allocation. I only see 10% in international investments. T Rowe International Growth and Income is a good (solid) foreign fund. Consider increasing international exposure.

You have 100% equities, other than what the target date fund has, that is a good move.

I would consider adding Value, as that is a solid fund too. IMO it might be better than capital appreciation. FYI PRWCX has undergone two managerial changes, and the new managers are not the ones responsible for the past performance. I sold this fund Jan 1 because I did not like where it was headed.

7000 per year to 401k is excellent. Is there a match with this?

7k growing at 10% per year for 20 years is $440,000. That is a good start.

$2400/year into an IRA (or other investment) growing at 10% per year is another $151,000.

$9400 per year into savings (investments) is a good start. What % of your income is $9400? If around 20%, you are doing well. $9400 is 20% of 47k. $590,000 in 20 years only replaces half of that 47k (replaces 24k).

20 years for you is age 44. If you increase the "time" factor, you can probably retire around age 51 or 55 with this savings rate.

To retire earlier you could
a) save more
b) learn to live on much less than you earn now (try to live on only 24k, for example)
c) invest better than a 10% annual return (not likely, but OK to try).
__________________

__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How much is enough to retire early on? DallasGuy FIRE and Money 76 03-11-2010 03:03 PM
I Don't Want To Retire Early! hocus Young Dreamers 16 06-14-2007 07:51 PM
How to retire early dory36 Other topics 8 03-05-2006 10:27 AM
Retire Early, Get More SS TromboneAl Other topics 21 05-01-2005 04:16 PM
I want to retire early too jason Young Dreamers 1 07-18-2003 12:31 PM

 

 
All times are GMT -6. The time now is 10:53 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.