Author Topic: Case Study: Investing Advice for Retiring Before 40  (Read 1990 times)


  • 5 O'Clock Shadow
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Case Study: Investing Advice for Retiring Before 40
« on: February 26, 2015, 11:49:39 AM »
Hey all,

The wife and I currently live in a high COL college town. We expect that to change pretty soon, as I'll be wrapping up a PhD and her Bachelor's in Accounting should pay better than the ridiculously oversaturated market here ($28K average for accountant I, versus $47K average national). Next year, we expect that a lowball estimate of income is $100k.

Here's our current lifestyle specs:

Monthly Living Expenses: $1671
Yearly Living Expenses: ~$20000

I'd be more specific, but I don't think there's too much left to cut back on. If we were to move, we'd ideally only have differences in total rent payments, although part of our strategy is to aim for areas with reasonable housing. My question is relating to how I should invest money once our annual income rises quite a bit. Our goal is to retire when we hit net worth of $1M + owned house, which should happen before 40 should all go well. Problem is, I'm not sure what I should do with surplus income following maxing each of our 401k and Roth IRAs. Admittedly, part of me wonders if we should max our 401k or not based on us planning on retiring about 20 years before we can get it penalty free.

Is there a percentage calculator or good way to determine what % of our investments should be able to be withdrawn sans penalty? Some napkin math suggests that if our living expenses grew to $30K a month we'd have ~50% of our retirement savings in our 401k by the time we hit our goal, is this too much? Should I keep 4% of my overall investments as my SWR even though I want my penalty-free withdrawals to last until I can touch my 401k? It feels a bit crazy for me to keep a huge chunk of money that will grow untouched for 20 years while my less penalized investments shrink.

Thanks in advance for your help and advice!


  • Pencil Stache
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Re: Case Study: Investing Advice for Retiring Before 40
« Reply #3 on: February 26, 2015, 12:26:39 PM »
Check out the bogleheads website (wiki) and look up sample portfolios and also read about investing policy statements. I also recommend the book "All about Asset Allocation" by Rick Ferri.

You want to educate yourself to the point where you can answer this question yourself, instead of getting opinions.

Good luck!



  • Magnum Stache
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Re: Case Study: Investing Advice for Retiring Before 40
« Reply #4 on: February 26, 2015, 09:14:23 PM »
Is your girlfriend graduating with 150 credit hours? If so she can start at a big 4 accounting firm for 55-60k. If she gets the cpa she can make 100k in 5 years.