I Asked ChatGPT How Young Adults Can Plan To Retire by 30 — Here’s What It Said

Retiring early has become a dream for many, even those who have barely started their careers. There’s even a whole movement built around this, called FIRE, which stands for “Financial Independence, Retire Early.”

But is it possible to retire as young as 30? I asked ChatGPT how young adults can plan to retire by 30. Here’s what it said.

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The first step to retiring at 30, according to ChatGPT, is to maximize your income as early as possible.

“Retiring young requires fast capital accumulation. The only way to do that in such a short time frame is to dramatically out-earn your peers in your early 20s,” the bot said.

Some of the ways that ChatGPT suggests maximizing your income include choosing a high-paying field, leveraging unique skills and having multiple income streams. It also suggests working in a high-paying market but living in a low-cost area, something the bot refers to as “location arbitrage.”

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ChatGPT recommends that you save 70% to 90% of your income if you expect to retire after just 10 or so years of working. The bot gave an example of earnings $200,000 per year and living on $20,000 to $40,000, thereby saving $160,000 to $180,000 a year.

ChatGPT provided this formula to estimate the number of years until retirement:

The calculation is approximate because it doesn’t allow for investment returns during the time you’re accumulating your savings. The example given is that if you need $1 million to retire and you’re saving $200,000 per year, it will take you about five years to get there.

You have to put your savings to work, and fast, according to ChatGPT. Suggested investments include stock market index funds, which return 7% to 10% per year historically; real estate, which can provide cash flow; business equity, including starting your own business or investing in one; and “high-risk/high-reward plays,” such as startups, crypto and angel investing, although the bot cautions that these investments are risky.

ChatGPT cautions you to be realistic in your definition of retirement. The FIRE movement defines retirement as living on as little as $20,000 to $40,000 per year (lean FIRE), which requires that you have $500,000 to $1,000,000 invested. If you want to be able to spend $80,000 to $100,000 per year, you’d need to have $2 to $3 million invested. These estimates use the 4% rule, which says you can withdraw 4% of your savings annually, theoretically forever.

ChatGPT helpfully offered to create a year-by-year plan to start at 20 and retire by 30. The plan assumes you start with nothing, and you need to have $1.25 million at retirement so you can withdraw $50,000 per year. It assumes you will save 70% to 80% of your income — which will begin at $80,000 per year and increase 10% per year — and invest it at 8%.

Here’s what it came up with:

Age

Annual income

Annual savings (80%)

End-of-year investments*

$80,000

$64,000

$69,120

$88,000

$70,400

$150,970

$96,800

$77,440

$242,766

$106,480

$85,184

$346,567

$117,128

$93,702

$464,702

$128,841

$103,073

$599,729

$141,725

$113,380

$754,474

$155,898

$124,718

$932,084

$171,488

$137,190

$1,136,029

$188,637

$150,909

$1,370,141

$207,500

$166,000

$1,638,952

This plan gets you to more than the required $1.25 million, so it allows for some fluctuation in investment returns.

There is one piece of advice that ChatGPT provides for those seeking to retire at 30 that you want to be very careful about following. The bot suggests, “Use Roth IRA, 401(k) (if available) and brokerage accounts to minimize taxes.”

Here’s what you need to look out for: Any money that you withdraw from a qualified retirement account (IRA, 401[k], 403[b], etc.) prior to age 59½ is subject to a 10% penalty in addition to being taxed as regular income. So if you’re using these types of accounts to minimize taxes, be sure you have enough saved in non-qualified accounts to withdraw in the first 30 or so years of your retirement. Once you reach that magic age of 59½, you can begin taking distributions from your qualified accounts.

Even ChatGPT admits that “retiring by age 30 is rare,” and, considering what is required, that’s likely true. Even if you could adhere to this draconian plan to save nearly everything you earn, you would have to live off very little for the next 50 or 60 years. And a bad investment decision or a down market could easily torpedo your plan.

So, retiring at 30 is possible. But in reality, you’d probably want to do something during those years, whether it’s volunteering, beginning a passion project or something else besides sitting around all day counting your money.