Today Show: Jason Fieber’s Retire By 40 Plan
Most people retire around the age of 65 but everyone wishes they could retire earlier than that. For many, retiring early is just a dream, but for Jason Fieber retiring by the age of 40 is a goal he has set for himself and he just might reach it.
Fieber is only 30-years-old but he has big plans to make sure he retires by the age of 40. He told the Today Show he saves 60 percent of his $55,000 a year salary. He moved from Michigan to Florida so he would save money on taxes. His rent costs him around $900 a month, transportation costs $50 a month, student loans cost $200 a month and he averages about $250 a month on his groceries. That leaves his total monthly expenses around $1,400 a month.
Fieber, who has a blog where he chronicles his journey towards saving for an early retirement, said the first couple years of saving were hard. He was eating nothing but sandwiches and pasta every day but it could be worth it when he looks into his bank account. Feiber has saved over $100,000 in the past three years. He is hoping to save around $400,000 before he plans to retire, figuring if he can spend $15,000 a year, like he does now, he should be able to live off the money till he dies.
Fieber’s retirement plan isn’t for everyone though. He does not plan on having children and he has not factored in whether a spouse would change up his plan a little. As for his health, Fieber said he is hoping he stays healthy and stays away from any costly medical bills.
Today Show: Is It Possible To Retire By 40?
Could Feiber’s retirement plan actually work though? The Today Show called in personal finance expert Carmen Wong Ulrich to find out if she thinks the plan could work or not.
The first thing Ulrich pointed out was that a third of America is on disability. If Fieber falls into that category he is going to watch his money become depleted very fast. She also pointed out that Ulrich is going to have to pay his own medical insurance when he retires, which can also cost him quite a bit.
Ulrich said if she was him she would invest some of the money. If he simply leaves it in a savings account and collects interest, he could make some money but he could make more money by investing it. She did point out that if he got five percent back on his savings he could make $20,000 a year which would be above his normal spending habits of around $15,000 a year. Ulrich said it is possible to retire by 40, but it is a lifestyle you need to be willing to live. As Ulrich put it, “He is living the life of a college student for the next 20 years.” Everything Fieber does has to be considered so he can watch his spending.
While Ulrich though the retirement plan might actually work for Fieber, she said if it was her she would get a second job a few days a week and save all the money from the second job. She said more people are taking that approach and they are reaching $100,000 a lot faster than people who skimp and save every penny.
Today Show: How To Find Retirement Number
Matt Lauer really wanted to know how to figure out his retirement number but Ulrich said there is no special number. You simply have to save and time the retirement right. If you retire too early you will not be able to take advantage of your 401K without tax penalties. Retirement is as much about timing as it is about saving money.