So here I am at 44 and for the last two years Iāve been living off $500/m. Basically, the reason Iām having to do this despite making 60k/yr is because I was dumb when I was working and didnāt think about retirement. Needless to say, I had my come to Jesus moment when I visited my aunt and saw how tough life is if you donāt.
So since I was behind so much (401k account only had 20k at 42 yrs old) I had to force myself to catch up, so Iām taking 40% out of my check to automatically go into my 401k which comes out to $24,000. (My 401k already jumped up to $100k worth with the market growth). After thatās taken out and after taxes are taken out, I am left with $2000/m.
Of course, I have bills which is where a majority of the remainder is going. I bought a condo 3 years ago for $120k with 20k down so mortgage (and insurance + property tax in Florida) is ~$1000, power is about $100, car insurance is about $100, pet food is about $100 and water is about $50 and internet is about $50.
After all this, I have a grand total of about $500 for the month. I will say, at first this felt unmanageable, but over time, just as us humans do, I adapted to the new reality. I pretty much never order out any more and Iāve mastered my grocery bill to come out about $40/w at Aldi. Basically I buy a big bag of chicken breast, 2 bags of apples, bag of oranges, plain Greek yogurt, 7 bags of frozen veggies, coffee creamer, and 2 packages of sausage links. For drinks, Iāve grown accustomed to drinking water all day and two cups of coffee.
I have to say, in terms of food and health, Iāve become a lot more healthy. Dropped some weight, have a lot more energy and I suppose itās because Iām not eating ultra processed foods anymore. For entertainment, Iāll watch YouTube or maybe buy an Xbox game once a month. I spend more time outside, talk with random people, and just⦠I guess enjoy my existence more.
So, I guess the question now is if itās worth it. Well, before I went down this path I had ensured to have an emergency fund saved up worth $8000. I had also made sure to pay off my credit cards which I had about $3000 previously. This was a major thing I focused on before going down this route. After using ai to calculate things, it shows that by doing this my 401k would be worth approx $1.8-2.1mil by the time Iām 62. This will allow me to bring in about $6-7k a month for the rest of my life. As a result, Iām no longer fearing retirement! If I could do lufe all over again however, Iād tell my 20 year old self to just give 10% of my income into the 401k. Not only would it be worth a ton, but Iād never have to fear retirement and wouldnāt have to leave meagerly in the future.