Can i retire at age 45-50 if i start now at age 19?

Question

Hey guys im wondering if it is possible to retire early if i get a head start right now. I just barely turned 19 last week and want to start my retirement fund but i dont know where or what to invest in for long term.. My dad mentioned an annuity thing for farmers insurance cuz thats what he does is he is an agent.. Ive heard mutual funds mentioned but thats pretty much it. And i know nothing about the both of them.. Any help?

Answer 1

As a general rule, insurance products make terrible investments.

Yes, it is possible to retire early if you start saving now.  45 may be too optimistic, but you never know.

Low cost mutual funds are the way to go.  Vanguard is one of the lowest cost mutual fund houses.  To simplify matters, you can buy into their Target Retirement funds that diversifies your money into differetn classes of investments, and allocates risk, based on your time until retirement.

Annuities can be OK when you are nearing retirement, as a way to provide yourself a fixed monthly income throughout retirement.  But don't even consider them now.  And even near retirement, approach them with caution.

In order to maximize your chances of retiring early, do your best to minimize your living expenses for the next 5 years, and invest every penny you can into the retirement account.

Answer 2

Yes.

Here's your plan:

1) Stay out of the annuities.  They're junk.

2) You want a mix of mutual funds:

1/4 of your money in Growth

1/4 in Growth & Income

1/4 in Aggressive Growth

1/4 in International.

3) Put 15% of what you make into these funds.

4) Look for funds that follow what I call the 10-by-10 rule.

10% or better average over the last 10 years or more.

5) Any cash you can put into a Roth IRA will be a huge blessing.  The money grows and is tax-free when you withdraw it.

6) STAY OUT OF DEBT.

I can't emphasize enough how important this is.

No credit cards, no car loans, and no student loans.

$500/month will turn into over $3,000,000 in 30 years.

Answer 3

At 19 years of age it's doubtful you're making sufficient income to be worrying about funding retirement.  I admire your thought process and yes if you do have enough discreationary income to begin to invest for that purpose than do so.  With all due respect to your father an annuity IS NOT AN INVESTMENT...It is an insurance policy with an investment component.  They take a monthly premium and divide it into two parts...one is for insurance protection and the other is for "investment".  Annuities generally have a very limited scope of choices with respect to the investment component.  At 19 years of age you DO NOT NEED LIFE INSURANCE (unless you're already married or have folks you need to provide for in case you die prematurely--I wish you long life).  

I suggest investing in Vanguard or T Rowe Prices Funds.  My personal favorite fund is First Eagle Global Investors which may/might be availiabe through your dad if he's  licensed to sell mutual funds.  You can get Vanguard and T Row Price Funds without him.  Their web sites have FREE tools to calculate retirement funding needs, etc.  OPEN AN IRA or if you're in your own business a SEP IRA and contribute the maximum allowable.  Go to the bookstore and buy a couple of books on investing for retirement and read them...learn the basics and prosper!  PEACE & GOOD LUCK!

Answer 4

If you retire at 45-50 you will likely need at least a 7 figure total nest egg and a situation where you have no debt to live well.

Assuming the historical market return of 9% you will have to contribute 10K  a year to make 933K in year 26 and 1496K in year 31. Can you afford to contribute 10 K per annum at your age? And will that be enough to live on over a 35-40 year period given inflation.

To retire young exclusively from retirement accounts will either take a very large annual contribution or consistent returns  that exceed what mutual funds typically earn.

Answer 5

sure if you have about $3 million saved by that time - you will have to pay for your own health insurance for 15 yrs -  in 30 yrs that may cost $3000 per month for a family - that will cost you $500-600,000 just for that before you hit 65 and can go on medicare - if that even still exists by then - unless you are making $100,000 per yr starting right now and live like you make $30,000 and save all the rest, there is no way you will be able to retire that early

Answer 6

You want something with strong growth potential, at your age.  Mutual funds can be good, go for a couple highly rated ones with growth as their primary objective.

Answer 7

Yes it is totally possible.  I'm 19 and invest in a Roth IRA for retirement and I invest in a mutual fund to buy a $250K house with cash when I'm 28-30.  

Along with investing into a house, my Roth should be $6.5 Million when I retire at age 59.5 (the minimum age to retire on a Roth without having major penalties).  And just living off the interest of the 6.5 Million I can potentially make 800K per year.  Of course you can work things out on the calculator all day.  Realistically, I'll add more than $500 per month when I get out of college and get a REAL job.

You just have to have the will power to do all of this.  It seems like you do!

As someone previous to me said, DO NOT EVER invest in anything that has to do with insurance.  You probably aren't ready for life insurance unless someone depends on your income, but when you are ready get term life insurance not whole life.  Having a father in the insurance business he may be brain washed into thinking whole life is the way to go (no offense against your dad, whole life insurance makes people in the insurance world ALOT more money than term).You pay WAY more monthly than term to get "cash value" that truly has no cash value... if you die your beneficiary will get NONE of that "cash" you've supposedly been building up.