Today, UFC star Conor McGregor announced he was retiring from the sport. I wonder what it feels like to retire at age 27?
Maybe a new career? Maybe the life of luxury? Maybe charitable endeavors? Whatever it is, I wish Conor the best.
But I also wonder if he’s financially secure and if he’s about to throw caution to the wind like may other athletes or if he’s got a plan? I help clients of all ages plan for retirement and other goals and the process is complicated because everyone has different spending expectations and unique circumstances.
But whether you’re a UFC fighter, a tech start-up success story or a long tenured business executive you’ve probably wondered if you can retire “early”. Many advisors will tell you, and quite frankly I will tell you as well, that to answer that question properly we need to do some fairly sophisticated planning.
But this is a 500-word blog post not a deep dive financial planning session and simple can be elegant. So for educational and illustrative purposes, here is a quick chart. When do you want to retire? What kind of lifestyle do you want? Then you can see a very general and approximate nest egg you’ll need.
If the numbers seem big, don’t freak out. Well, maybe freak out a little…
The chart makes some rather basic assumptions about real rates of return (4%) and life expectancy (age 90) and takes some rounding shortcuts, but you get the general idea. And the chart communicates a really basic and important point, the earlier you retire, the more you’ll need. Simple as that.
The good news is that if you’re 27 and you can’t retire just yet, that’s OK. You can do the next most important thing, which is to start investing early so that you’re not trying to play catch-up as you close in on retirement.
We saw the power of starting early with Michelle in a prior post: Why Her Co-workers Couldn’t Stop Staring at her 401(k) statement.
There are many strategies available to help people of all ages plan and make progress towards their retirement goals. If you’d like to explore retirement savings strategies, your 401(k), 403(b), IRA or any other financial matter with a consultant, please use the button below to book time now.
- Investing and investment management involves risk, including the loss of your initial investment or any investment gains.
- Past performance is no guarantee of future results.
- This generic information is provided for educational purposes only and should not be construed as a recommendation for any individual to take a specific action.
- Please invest prudently and seek professional help from a financial advisor, investment manager, accountant, lawyer or other professional on matters that you are unsure of or that are unique to your personal circumstances.
- Financial Advisor and Investment Management Services provided by J. Bradford Investment Management, Nashua NH.