Can These Influencers Really Retire at 40?

Emily and Kenji, a couple in their mid-30s with a $2.2 million net worth, seek financial planning advice to achieve early retirement at age 40 and ensure long-term financial independence.

• Achieved significant wealth by mid-30s through high earnings and aggressive debt elimination.

• Current 'Coast FIRE' plan requires substantial supplemental income or adjustments to sustain early retirement.

• Optimizing tax-advantaged accounts and working slightly longer ensures long-term financial security and desired lifestyle.

Emily and Kenji have built a $2.2 million net worth by their mid-30s, fueled by high incomes, extreme frugality, and the decision to pay off their home mortgage early. They aim for 'Coast FIRE'—retiring at 40 using a brokerage account to bridge until age 60, when their traditional retirement accounts become accessible. Initial projections indicate their current plan leaves them short in retirement, highlighting the need for strategic adjustments to ensure financial security beyond age 60.

Financial Background and Goals

• 00:00:28 Emily (34) and Kenji (36) have achieved a remarkable $2 million net worth, despite Emily growing up in poverty. Their primary goal is financial independence and the option to retire by age 40, driven by Emily's corporate burnout and Kenji's desire for flexible streaming work. They seek expert advice to plan for the next 40-50 years, aiming to transition from their successful careers—Emily in social media marketing and Kenji as an early Twitch streamer playing 'Magic the Gathering'—to a 'work optional' lifestyle.

Current Financial Snapshot

• 00:06:08 The couple's current net worth is nearly $2.2 million, including $31,000 in cash, a $1.1 million investment portfolio, and a $1 million primary residence, all completely debt-free, including their home mortgage paid off in under three years at a 2.3% interest rate. Their combined income peaked at $425,000 in one year, averaging $250,000-$300,000, with a savings rate often exceeding 50%. While they regret not balancing mortgage payoff with maximizing investments given their low interest rate, their focus was on achieving freedom and flexibility through debt elimination.

Early Retirement Plan & Challenges

• 00:11:20 Emily and Kenji's early retirement strategy involves 'Coast FIRE': using a brokerage account as a bridge fund from ages 40 to 60, while traditional retirement accounts grow until age 60. Their initial plan of saving $7,000 per month into the after-tax account aims for $1.2 million by age 40. However, conservative projections, assuming an $8,500 monthly burn rate increasing with inflation and a 6% return, show their bridge account depleting by age 52, emphasizing the need for supplementary income of approximately $4,250 per month to sustain the plan to age 60, at which point the taxable account would be exhausted.

Optimizing for Long-Term Security

• 00:26:44 The initial plan risked underfunding their post-60 retirement, leaving them with an inflation-adjusted $70,000 annual income from $3.6 million in assets, which is less than their desired lifestyle. To achieve a $102,000 annual income in retirement, they would need $5.3 million by age 60. A revised strategy suggests reallocating their $84,000 annual savings: maximizing retirement accounts (e.g., solo 401ks, backdoor Roths) with $45,000 and contributing $39,000 to the bridge account. This approach, combined with working three additional years until age 43, allows their retirement assets to grow to $1.5 million by 43, ultimately reaching the $5.3 million goal by age 60 while preserving some after-tax assets.