How to Retire at 40

The “4 percent rule” is a bedrock of retirement planning. But does it apply to those who quit working before 65? The rule of thumb holds that retirees who spend only 4 percent of their investment portfolio annually, adjusted for inflation, will be able to stretch out their savings for the rest of their life. For example, a $1 million brokerage account gets you $40,000 a year to spend.

Lately, the 4 percent rule has been under assault, with experts warning that the future could bring weaker market returns, an increased life span, or both. “If you retire at 40 with a couple million dollars, you’re going to worry—about financial emergencies, taxes, inflation, market crashes, and the chance you’ll live a lot longer than you’d planned for,” says Robert Karn, an adviser with Karn Couzens & Associates in Farmington, Conn.

Evan Inglis, an actuary at Nuveen Asset Management, offers an alternative rule: Divide your age by 20—couples should use the younger partner’s age—to get the percentage that you can safely spend. For a 40-year-old, that’s 2 percent, or $20,000 a year on $1 million in savings.

How do these concepts play out in the real world? We asked three people who retired in their 30s and 40s to explain how they’ve made it pay off.

One of the profiled is the famous personal finance blogger RB40. I always think he cheats by having his wife work. Also writing a blog is not exactly totally work free. But the other example is a couple in Redwood City. That seems to be true retirement. They refused to say how much money they have though…

I retired at 48…Have quit retirement several times since…It is highly overated…find a profitable hobby…then it doesn’t feel like a job. …


Bravo! Retirement from a job is only when you didn’t like the job in the first instance, you’re there for the money. If you love what you’re doing now, there is no need for retirement, keep doing it since you have so much fun till your health couldn’t do it or a bigger need come around. Money is a bonus, and you’re contributing to the well being of the society. Btw, I retire at the age of 44.

I do not agree you are retired. You stopped working from company, but starting working on your business. If you actively work for a business, at least 3 days (or 20 hours/week), it is semi-retired.

Simple check is Just take 2 weeks vacation from tomorrow onwards. If you feel your business will get a hit or your customer gets impact or your revenue/income stream gets impacted by your sudden vacation, you are still on the job. It shows you are tied to your income/revenue.

You would have reached that stage now, but not at 48 !

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I’m not sure where to add this, but don’t want to start a new thread…

Retirement is implied to mean quit from a W2 job. I did quit at 40s for none of the three reasons. IMHO, one should quit from W2 as early as possible.

My son said “Why would I need three reasons??? Isn’t it obvious?”

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After people told you.

Nahhh, no one needs to tell him why to retire early. It’s patently obvious to kids that they don’t want to have to work.

Not the same as early retirement.

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Accumulate $5M net worth by 40 then you can retire. Anything less than that you can’t.

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The day one of you retires without being attached to the phone for the famous call at midnight from the tenant complaining of the cat mating with others, you give me a call. I will congratulate you. Meanwhile, stop BSing yourself. :joy:

My brother owns many rentals and went back to China. He doesn’t want to live here anymore. It is possible to be totally hands off with rental managment.


Does he depend on that money?

Think about it.

He needs the cashflow only for maintenance purposes so that those rentals can be self-sustaining.

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China? Shenzhen? How many girl friends did he has? Every night go night clubs?

Chengdu! :smile:


Famous for pretty girls. :+1: