Savings?

[BigMoneyJim]

I am so dumb when it comes to investing.

Nobody's born an investing genius. And they don't teach you this stuff in school! You are well on your way to self-education and early retirement, so don't sweat it; give yourself time to learn.

I know you have given me lots of advice here already, but would anyone tell me whether I should contribute more than 7% to my 403(b) plan or should I open some other account somewhere else.

That's really the kind of thing only you can figure out. There are two aspects to your question: "How much should I save?" and "How should I save?" As far as how much, there is no pat answer, but I like the advice I've seen echoed here a few times: Live below your means, save till it hurts and then back off a bit. Repeat as needed. You are saving way more than the average bear (who saves almost nothing) so you're ahead already.

For the "how/where to save" question, if I recall the "standard" priority list goes something like this:

1. Save enough to get maximum company match in 401(k) (or 403(b) or similar company-match plans)
2. Maximum yearly contribution to a Roth IRA. (currently $3000 or $3500 I think.)
3. Save to legal limit of 401(k)/403(b)
4. Have an emergency fund of X months in an accessible after-tax account.
5. After-tax savings. (Savings accounts, CDs, bonds, mutual funds, etc. in nonretirement accounts)

Myself, I am going to max my 401(k) before considering contributing to an IRA because it's less work, the taxes are pre-adjusted and I can't goof it up by procrastinating or having the money burn a hole in my pocket as could happen with my saving for an IRA/Roth IRA and then investing later. This is an example of fitting the savings plan for personal situations: I'm lazy and procrastinate a lot.

Occasionally I've seen it argued that there are benefits to investing in after-tax accounts before maxing out retirement accounts. The benefits have to do with the accessibility of the money and the lower captial gains taxes. I haven't seen that discussion lately though. Again, for myself I know from experience that I'll be tempted to use that money if it's not locked away in a penaltied-withdrawal retirement account.

Note, I want to be able to retire early and with the 403(b) plan I can't touch that money until I am really old.

I know some of the answers are confusing for now, but rest assured you can get that money penalty-free before age 60 and age 55 if you retire before then, so adding more to your 403(b) doesn't lock the money away until you're "really old".

Someone mentiones about rolling it to Roth IRA, but I am not sure if I qualify for that. If so, when would I do that and where can I calculate how much money I will have in about 10 years?

You could roll the 403(b) over when you quit your job or retire. You can roll into a regular IRA or a Roth IRA. You probably also have the option of leaving the 403(b) as is with TIAA-CREF. Don't let this confuse you, though; these are just future options to investigate.

A Roth IRA is a set of rules, just a different set of rules from the 403(b). You would very likely keep your same investments so the returns would be the same. The thing with the Roth IRA is the taxes; if/when you roll over to the Roth you pay income taxes on the amount rolled over. Ideally you avoid drawing from your assets to pay the taxes because that's a penaltied withdrawal.

After quitting my last two jobs I rolled over my 401(k)'s into a regular IRA because 1: I want full control of my money and the 401(k) plan had limited investment options; and 2: because I didn't have the money to pay the taxes for a Roth conversion.

(post interrupted by some phone calls...if this post doesn't make sense I'll come back and fix it later)

 

[John Galt]

Hey BigMoneyJim! Excellent response to Maggie's query.

I want to comment about money "burning a hole in your pocket". 11 years after semiretirement and 6 years
after fully retiring, I have to fight this continuously.
I think it's mostly due to all the years when I just earned
and spent without giving any thought really to retirement,
ER or otherwise. After my epiphany in 1992 I did some big time backsliding spending-wise. And, I can't really blame any of it on my first wife as I was even more loose than she was when the money was rolling in.
Today, even though it's easier to resist unnecessary
spending, I still have 2 factors working against me.
One, I am lazy and refuse to track every dime.
Years ago I tried this and found it quite distasteful.
The second issue is my age. I am acutely aware of
the passage of time and activities/adventures
disappearing from my list of "possibles". Thus, I
sometimes just say to myself, "what the hell, I am not
going to live forever" and then I do a little "off budget"
spending. I think this is healthy as long as you don't
overdo. I have said before this stuff gets easier over time.
This is partly due to being near to SS now, but also
the realization that I no longer have as many years
of life to cover. Long story short, I've always been a
"Do it now!" kind of guy. Unfortunately, there are
quite a few things I can no longer do. No matter how
healthy you are (or think you will be) this will happen to
all of you eventually.

I knew someone would come up with a great post for
Maggie. Kudos to BigMoneyJim..................

John Galt

 

[Maggie]

I know some of the answers are confusing for now, but rest assured you can get that money penalty-free before age 60 and age 55 if you retire before then, so adding more to your 403(b) doesn't lock the money away until you're "really old".

Can you explain to me how I can get that money before I am "old" I haven't seen anything that sayd that. When I asked TIAA-CREF about that they keep saying I need to be over 60.
I just don't understand

I wanted to buy mutual funds thinking that that would be the best way to save up and be able to take out money at any time. Am I correct?
Where would you invest your money at age 26 after 403(b)?

 

[BigMoneyJim]

Can you explain to me how I can get that money before I am "old" I haven't seen anything that sayd that. When I asked TIAA-CREF about that they keep saying I need to be over 60.
I just don't understand

OK, I see why you're so confused. I went to the TIAA-CREF web site and it's damn near impossible to find info on how to get your money out of TIAA-CREF's hands short of investing in their annuities. The reason for this is they want to make as much money as possible off of you and annuities are a good way to do it in addition to making sure your accounts stay with them. (Additionally, an annuity purchase is a lump sum transfer of assets you can't do via the IRA's 72(t), so I see why they don't let you know about this option...they don't ever get to sell their annuities if you use an IRA and 72(t) to retire early.)

Anwyay, the next best thing is to show you how easy TIAA-CREF says it is to transfer money from other plans. When reading how easy it is to rollover money from other companies' 401(k)'s, 403(b)'s and 457's to a TIAA-CREF IRA, realize it works the other way, too: You can go to another company and they'll tell you how easy it is to transfer from TIAA-CREF's 403(b) into their IRA. I'm sure if you tried hard enough you could get TIAA-CREF to admit they can roll over their own 403(b) into their own IRA if you so request and wish to stay with them. This link tells you how easy it is to send them your money. This link echoes the first link and lists the types of accounts eligible for rollover.

That should give you an idea that it's possible. You can follow up with others to convince yourself. Now, I think you're still confused as to when you would do this: When you quit your job and/or retire. When that happens, then you can roll over your 403(b) into an IRA, and then when you're ready to start receiving income you use the 72(t) exemption and simlply take Substantially Equal Periodic Payments (details omitted here) as withdrawals each year and pay income tax on them. (You never paid income tax on the 403(b) contributions, so you pay them upon withdrawal.)

I wanted to buy mutual funds thinking that that would be the best way to save up and be able to take out money at any time. Am I correct?
Where would you invest your money at age 26 after 403(b)?

Mutual funds are a type of investment; you can buy mutual funds within your 403(b), within an IRA or in an after-tax account. .... The short answer is that the question is ambiguous... I have to run do some work, so I have to cut this short for now.

 

[BigMoneyJim]

Okay, I have some free time now.

To be fair, I went to Vanguard's site and tried to find info on converting a Vanguard 401(k), 403(b) or 457 into an IRA and had similar difficulty as on TIAA-CREF's site; Vanguard also gleefully tells you you can transfer all your assets to Vanguard and offers annuities for payouts. The rollover option exists, but clearly it is in the investment company's best interests to guide you eventually towards their annuity offerings and not offer the information that you can transfer away from them or simply withdraw from the plan/IRA under the allowed conditions.

So, to summarize so far: If you retire early you can still use the money in your 403(b) before age 60 (and before age 55) by first rolling it into an IRA (with TIAA-CREF or another company) and then taking the 72(t) payouts. Of course you shouldn't take my word for it, but you can take that sentence and show it around and get confirmation.

Now, the mutual fund question. I was going to carefully differentiate between account types, investment types and mutual fund asset classes, but that's really redundant and unnecessary. Let's try this:

You sound like you have extra money to save and want to save it somewhere. Here are some options and advantages/disadvantages of each:

Option "put it all in the 403(b)".
Advantages:

• Pre-tax savings with no extra tax paperwork and no withhold-return money cycle
• Tax-deferred earnings
• Can retire early by rolling over into an IRA at retirement date and using IRA's 72(t) withdrawals

Disadvantages:

• Before retirement, money cannot be withdrawn without 10% penalty and even then only under certain circumstances
• Limited investment options (you probably have 5-10 funds to choose from)
• Capital gains earnings are taxed at income tax rates at time of withdrawal (or at time of conversion to Roth IRA) instead of capital gains rate (at least somewhat offset by fact that principle was tax-deferred)
• Assuming early retirement and IRA conversion, 72(t) payout in early retirement requires planning since the yearly payouts are stuck at or near your designated amount for 5 years or until age 59 1/2, whichever is later

Note: I believe you can borrow from your 403(b) and pay yourself back with interest. Depending on who you talk to this could be an advantage (debt consolidation, borrow for house down payment or emergency funds) or disadvantage (opportunity loss while money is out of the market, temptation to spend money, possibility of defaulting and owing income tax + 10% penalty on the remaining balance).

Option "put it in mutual funds in an after-tax investment account":

Advantages:

• Can withdraw money at any time for any purpose
• These types of accounts can offer ATM access and/or check writing
• Virtually unlimited investment options

Disadvantages:

• Dividend distributions increase your taxable income (possible to limit by investment asset class; e.g. municipal bond funds or tax-managed stock funds)

Option "put it into a Roth IRA"

Advantages:

• Tax-free earnings!
• (I think) can withdraw principle after 5 years with no penalty
• Plenty of investment choices
• (I think) Have the 72(t) option available for early retirement

Disadvantages:

• Earnings can't be withdrawn before retirement without 10% penalty
• In contrast to other tax-deferred options, must pay income tax on contributions
• 72(t) payout in early retirement requires planning since the yearly payouts are stuck at or near your designated amount for 5 years or until age 59 1/2, whichever is later

Option "put it in a traditional IRA"

Advantages:

• Tax-deferred earnings
• Tax-deductible savings
• Have the 72(t) option available for early retirement
• Plenty of investment options

Disadvantages:

• Have to wait until tax filing time to be refunded the withheld income tax for the contributions
• 72(t) payout in early retirement requires planning since the yearly payouts are stuck at or near your designated amount for 5 years or until age 59 1/2, whichever is later

Note that in all of these options mutual funds are your most common and likely investment option. If you decide to put money in an after-tax account you may want to invest in less volatile assets (bond funds or money market funds) if you think you may use the money before retirement, say for a house or car or 20 foot plasma TV.

(ack! message too long! Continued in next post...)

 

[BigMoneyJim]

(posting a second message because it said this was too long for one message! Boy can I type!)

Again, a summary: You could put every saved penny into your 403(b) and still access your money even if you retire before 60. In such case, instead of the annuity pushed by investment companies you would--after rolling into an IRA--simply withdraw yearly from your savings. Whether you do that or put some savings into an after-tax account or a Roth IRA is a question of whether you plan to tap the money before retirement or how beneficial you think a Roth IRA is compared to your 403(b).

I think my best advice to you so far is this:

You are well on your way to self-education and early retirement, so don't sweat it; give yourself time to learn.

I think you're really hoping for specific advice, and I think I will offer some: If you've decided how much more you can save, put that into your 403(b) while you learn more about your options. There are fewer sharks on that route than with opening an individual account, and you can always reduce your contributions later if you decide another place is better for your money.

My first book on investing (well, really personal finance) was "Personal Finance for Dummies". I also liked "Get a Financial Life". The other investing stuff I know I've picked up online over a period of 5 years, but I'm sure there are decent investing books. I've seen "Investing for Dummies" and "Mutual Funds for Dummies" at the bookstore but haven't looked through them. (I used to really like Dummies books, so I'm not calling you a dummy).

 

[trumpeting_angel]

BigMoneyJim -

Congratulations! I see your time clock is winding down! That's wonderful!

Maggie, I think it's great that you are thinking about this at 26. I wish I'd thought about it at 26. I know that I thought I needed all my money then, and that when I was "old" I wouldn't have all the energy and interest, so I wouldn't "need" the money for all the fun things I wanted to do.

Now that I'm 50, took up ice hockey 2 years ago, putting a daughter through prep school and, one of these days, college, I look at it a little differently.

I think TIAA-CREF has many advantages. They are known as a solid, conservative, low-fee investment house. Not quite the lowest-fee advantages of index funds, but good. If I were 26 and the bulk of my long-term savings was in TIAA-CREF, I would put additional savings elsewhere. In index funds at Vanguard, to be specific. In a Roth, if I were eligible.

I would save as much as I could without turning life into a big sacrifice. However, I'd pay attention to material consumption. Our society teaches us to buy, buy, buy and then we have to hold huge tag sales, or bring vanloads of stuff to the Salvation Army, to make room for the new stuff. Or buy a bigger house with more closets and a bigger garage to make room for the new stuff. Idiotic.

Avoiding the material seduction and saving like crazy gives one incredible options, like DECIDING how long you want to work, and what type of work, and how many hours a week (year) you want to work, later on. So I'd recommend saving as much as possible. Drive that car into the ground. Walk instead of drive. Bicycle instead of gym membership. Etc.

I'd recommend Jane Bryant Quinn's books, for starters, and Bogle or Bernstein on specifics about investing. Quinn will give you the basics on money management, and the B-guys will teach you why nearly everything you read in Money magazine, Kiplingers, the financial papers, most financial websites, etc., is wrong. (Virtually any advice about picking stocks, timing the market, etc., is contradicted by the academic research on market behavior.)

But stay calm. You have some time. Do a little reading. Save a little more. And then a little more than that. There is great advice here, although not everyone will agree. Keep reading; you're obviously smart enough to figure it out in time!

Good luck!

Anne

 

[Maggie Dziadkiewicz]

Thank you so much for your responses. They are extremely helpful.
Yesterday, I increased my contribution to 403(b) from 7% to 10%. I don't know why but I am still feeling a little scared that I won't have access to that money until I am 60. When you say that I will be able to take out that money before 60 what does that really mean? At any age before 60 or at like 55 and up?

 

[John Galt]

Hi Maggie! I will let someone else answer your question about how and when you can take money out,
or you can check some old posts.

When I was your age, older folks would tell me to
start saving/planning for retirement, and that the time would just fly by. I didn't listen. It seemed like forever,
kind of like summer vacation when you were a little kid.
Well, I'm here to tell you that "they" were right.
Forty years went by in a flash.

John Galt

 

[Maggie D]

Let me see if I understand this correctly. This might be an extremely silly question, but is this scenario possible?

Let's assume that I decide to retire at age 35. Let's say I have $500,000 saved in my 403(b). Assume I roll it into IRA. Let's assume I am going to live until I am 80. Does that mean that I will have to divide that $500,000 into 45 years, which leaves me with around $1111, which is about $925/month, which is about $231 a week??

Does it work like that or is this a little more complicated?

 

[brewer12345]

It is more complicated than that, but the impoirtant point is that if you have enough saved in IRA accounts, you can get at the money via a 72T exception. So don't worry about the mechanics for the moment because it will be many years before you have the kind of scratch saved to retire. I would also try to squeeze just a bit out of your budget (2%) and build some after tax saving as a cushion/flexibility, but its not critical as long as you are saving/investing.

 

[Maggie D]

Thanks.
I can squeeze out 2% more, I just don't know where to allocate it. I don't know anything about investing

 

[sgeeeee]

Thanks.
I can squeeze out 2% more, I just don't know where to allocate it.  I don't know anything about investing

Maggie,

A good place to start when considering after tax investments is with low cost, broad index mutual funds.

"Low cost" refers to the fees that mutual fund companies charge you to invest your money. Some funds charge 2% or more of your balance each year just to keep your money. Others charge less than 0.2% for the same service. Once your balances get large, the difference in fees becomes very significant.

"Broad index" refers to the fact that these mutual funds invest in a large number of stocks or bonds that are determined by financial indexes. This means that you don't have to pay someone to sit around all day and manage what to invest in and what to sell. The best news is that index funds usually outperform managed funds.

There are many mutual fund companies that offer low cost, broad index mutual funds. Vanguard offers several and tends to be very competitive. But other fund companies like Fidelity offer nearly identical funds too. If you ask, people on the board will be glad to tell you who they use and why.

Next, you need to decide which index funds you might want to invest in. Some of the more popular choices are: Total Stock Market Fund -- this fund invests in 1000's of individual stocks and attempts to represent the total stock market return and risk profile; S&P500 fund -- this fund invests in the 500 companies that make up the S&P500 stock index (that makes it very easy for you to track since most investment publications will include S&P500 performance); Total Bond Index Funds -- this fund invests in bonds according to bond indexes rather than in stocks. There are many more, each focusing on a different segement of the market.

The stock/bond allocation choice for your investments is very much a personal choice issue. Each person needs to develop their own understanding of their desire for return vs their aversion to risk and figure out what they are comfortable with. Unfortunately, this seems to be a lifetime struggle that changes with age and current situation for most. The good news is that you can always change your mind. You might start (at your age) by putting everything into Total Stock Market Index funds, then as you learn more decide to transfer some or all of it to other funds. If you choose one of the large mutual fund companies like Vanguard or Fidelity or several others, they will have plenty of funds to choose from and transfers won't cost you anything. If you're not sure you really want to invest that money for at least the next 6+ years, you might want to consider a bond fund instead of a stock fund.

You can get specific help starting your mutual fund investments at the web sites for any of the mutual fund companies.

Good luck. And keep asking questions.

 

[malakito]

Let me see if I understand this correctly.  This might be an extremely silly question, but is this scenario possible?

Let's assume that I decide to retire at age 35.  Let's say I have $500,000 saved in my 403(b).  Assume I roll it into IRA.  Let's assume I am going to live until I am 80.  Does that mean that I will have to divide that $500,000 into 45 years, which leaves me with around $1111, which is about $925/month, which is about $231 a week??

Does it work like that or is this a little more complicated?

It can be as complicated as you'd like to make it, but it can be really very simple, and one option (not necessarily the best option, you should learn about them all) is almost as simple as you describe. I believe it's called the "life expectancy" method, and it works something like this:

1. You retire at 35 and roll your $500,000 403(b) into a traditional IRA.
2. You go to some IRS table that tells you how much longer they think you're going to live based on your current age. (This is slightly different in that you don't get to guess, the IRS tells you.)
3. You take your current account value and divide it by the number of years the IRS says you have left.
4. You take that amount out.
5. Repeat yearly.

As I said, there are many other options available, but it really can be that simple.

malakito.

 

[John Galt]

Well, I suppose it could be that simple, but in the real world there are about a bazillion permutations.
Sorry Maggie I will offer Maggie this however.
You can get a wealth of info at this site, everything from the incredibly complex to the amazingly simple. It's
all here.

John Galt

 

[Maggie D]

I don't know why, but I feel sad today. I hear all the stories about people here that retired early. I look at myself and things don't look promising for me. It makes me feel bad just thinking that most of us in this world spend majority of the time doing things for somebody else whether we like it or not and we can't get out of that until we pretty much have a little time lift to live.
I would love to do things NOW. Things that I love to do, but there is simply no time! When I get home from work there is so little time left that I can't even attempt to do the things I would like to do. I feel unproductive at work and that adds to my bad mood.
It feels to me that I will never be financially independent.
For someone making mediocre money and saving 10% of it in 403(b) is nothing. Do all people here who retired early made tons of money at their jobs and saved most of it?
I have no debt, I have no real spendings. And yet it seems I'll be a slave for the rest of my life.

 

[simplelife]

Maggie,

I think we're in the same boat here...I love this site, and read it almost every day, but now and again it becomes a little discouraging. I'm 30 and my salary is mediocre as well, I have a family to support, and still I have the dream of ER. I'm saving almost 30% (including company match) of my salary and still it seems frustrating sometimes, especially when a lot of folks here are lucky enough to be receiving pensions (do they exist anymore?).
Keep your head up, we can do it! I know we can...

Does anyone else out there feel the same way?

Mike aka simplelife

 

[KB]

Maggie,
I can relate to what you are saying. I'm not retired yet, I hope to be in about 21 months.

I am a signle mother with 2 kids - 18 and 16. I've never had child support and have worked my way up to a decent wage just recently. I bought my first house in 1977 and have upgraded 3 more times. This is what will able me to ER. My current house is worth more than 400,000 and I paid cash for it in March (345,000). I added a few dollars to my house payments, sometimes only 5.00, and over the years eventually it paid off.

I also went back to school to get a better education to make more money. I make 75,000 now and which sounds like much less than most of these people made. I cut my expenses as much as possible and saved as much in my 402K as I could. I only have 88,000 in 401K/IRAS but do have a couple of pensions.]

Keep at it. If you want to succeed, you will. I do have to sell my house to ER, but freedom is more valuable than a house. I live near the capitol of CA and this town has grown so much that the value of my houses grew more than they would have in other areas.

Don't be discouraged. you can do it if you want.
I'm 51 BTY.

 

[John Galt]

Maggie, Maggie, Maggie.................you need to talk to me girl. Now, first of all, I could be one of those who made tons of money (or inherited it, or won it, etc),
saved a bid pile and then retired to live a life of ease.
I did do the first part (made lots of money) but my first
wife and I spent almost all of it. Then I decided I would
retire anyway (tired of supporting a lifestyle-----mine and others - sound familiar??) So, I just did it
anyway at 49, assuming "we" would work part time
and both be semiretired. "We" didn't want to work part time, so "we" soon became just me. So there I am
with no spouse, and no debt to speak of, but also no
real long term plan. BUT, I am still semiretired and do have some assets. I figured if I could hold onto my base and work a little bit, I could make it until 62
(some luck wouldn't hurt either). Everything worked
out better than expected. I remarried and my new wife
(younger) doesn't mind working a while. I landed a good paying consulting
"bridge job" which I worked until I was 54. I maximized the assets I did have, and most importantly, I got
serious about planning my ER, even though I was already ERed. Now "the rest of the story". I have aged
parents nearby and I am the only sibling nearby to help them. I have several chronic health problems myself which have curtailed some of my activities. I just throw this
in to show my life is not a bed of roses. BUT, am I happy? You bet. I am better off in almost every way than 99% of humanity. It would be pretty dopey of
me to be depressed or singing the blues over my life.
Consider this. My wife works in a nursing home with
all manner of cases, some younger than me. She
works with misery every day, the dead and the dying.
(The woman is a saint). Many of my contemporaries
have died or suffered terrible tragedies. My advice is to
squeeze all you can into every day (regardless of your
financial/ER status) because someday
you will wish you had. We all will.

John Galt

 

[Maggie D]

Simplelife: I know we can do it, and I know there are many people out there who are in the same boat. It's just that sometimes I have those days when I feel that it's all pointless, all the efforts are for nothing because I'll always be a slave.

KB: If I was making 75K I would consider myself rich, so you can see why ER doesn't seem like an option for me

John Galt: Thanks for the supporting words. I guess I am just having a bad day , but I went and got myself some books on investing Feel a little better now, but I bet in the morning when the alarm clock goes off I'll probably feel the same as this morning. I know there are a lot of people worse off than I am.
Life just seems unfair sometimes

 

[platypus19]

I think financial independence is more of a journey than a destination. As you make progress, the chains of wage slavery get looser and weigh more lightly on you. More choices and opportunities open up as you go along.

I read something once that said the first step to FI is to become a Thousandaire, that is, to have a net worth of a thousand dollars. That sounds like so little, but many people never make it to that level. I'm sure every person here who has achieved FI would warmly congratulate any new Thousandaire. That's because the know-how to become a Thousandaire is the same skill that will eventually take you much, much further. Young dreamers need to occasionally look with pride at what they have already achieved, instead of focusing on what is yet to be done.

Life clobbered me good a couple of times. I had to become a Thousandaire more than once!

I always found The Richest Man in Babylon to be a good source of inspiration.

 

[cute fuzzy bunny]

I bet in the morning when the alarm clock goes off I'll probably feel the same as this morning.

Yep you have at least two advantages.

You were still here when the alarm clock went off.

You own an alarm clock.

I'm betting the majority of people in the world WISH they had an alarm clock.

One step at a time. You'll get there. In the meanwhile you're getting something many people dont get, and none of us ER's have. A paycheck!

 

[JonnyM]

You have it so much better than you even realize..

Maggie, yo Maggie!

You are so far ahead of the game.

I'm a relative newbie here. You are at the right place. These people will help you. In the mean time, don't get down about your situation. You are so far ahead of the game compared to most.

You are already THINKING about the ER life. You're beginning to plan for it. You're saving what you can. I run into people in their 30's/40's/50's everyday at my job that have no idea that retirement is something one might actually "plan" for. Maggie, you have a clue. At 26, I was not making didly, had nothing, saved nothing, and thought I was doing pretty OK. But I had NO thoughts to my future. You are totally on the right track. It will take some time.

I'm close to ER after just 6 years of intense planning, but 21 years of working for the same place. When I started in an entry level position, I was the equivalent of the mail-room flunky, and over time by continuing my education and learning the ropes I progressed, promoted, learned, advanced, and now the money is pretty decent. Now I can save more, and there is no reason why you can't do something similar. You'll get raises, be able to put more aside both in percentage, and in very real terms as your salary increases over time.

I'm not one that considers 35 a realistic goal, but I'm not a risk taker. I feel like I could get anyone to FIRE in 20 years who has an open mind to the possibility. You have that Maggie. It is more than doable to set a goal of ER'ing at a respectable ER age with the headstart you've already demonstrated. Any chance you'd talk to my 20 something kid for me?

 

[John Galt]

That is right.............almost anyone can do it
with the right mindset and some help. Maggie
has a "leg up" just because she is thinking about it.
I never did until I was almost 50. A big mistake.

John Galt

 

[Skylark]

I don't know why, but I feel sad today. I hear all the stories about people here that retired early. I look at myself and things don't look promising for me. It makes me feel bad just thinking that most of us in this world spend majority of the time doing things for somebody else whether we like it or not and we can't get out of that until we pretty much have a little time lift to live.
...
I have no debt, I have no real spendings. And yet it seems I'll be a slave for the rest of my life.

It is a long road to financial independence. You are not the only one who is starting out. Work sucks but if you learn to live on less than you make, you can build up a nest egg. Once you set up a savings plan, just follow it and avoid financial traps such as consumer debt.

One thing that is important is to set up and follow your financial plan, then forget about money. You can't buy happiness. Focus on things that interest you, like learning music, spending time with friends, walking or exercise, learning a language, and doing things that make you feel good that don't really come with a big price tag. Try to steal time for yourself by taking vacations, calling in sick on beautiful days. Do things that improve your life.

Focusing all your attention on money will make you depressed. Go out of the house with a couple of bucks in your pocket and spend an afternoon walking at the park and get some ice cream.