Few folks are fortunate enough to be multi-millionaires by the time they turn 40. Such an individual took to the subreddit r/ChubbyFIRE in search of a bit of retirement advice. The person has a $3.2 million sum saved, is shooting for $5 million before retiring, and doesn’t yet have kids or own a home.

Undoubtedly, with such a supersized nest egg early in life, this person has a great deal of financial flexibility. Even with kids and a home thrown into the cards, the person may just be able to retire without having to raise the bar further to $5 million.

In some instances, it can make sense to keep raising the bar. The more cash that’s banked, the greater the potential opportunities. At 40, the Reddit poster is still incredibly young. So, there’s really no sense in rushing a decision as major as having kids or even buying a home.

Key Points About This Article

• Retiring early can be difficult, even if one has more than enough to make it happen.
• Kids and a home can take a dent out of one’s retirement nest egg. But they don’t need to be must-haves, especially for those keen on reaching chubby or fat FIRE.

A $3 million sum opens up many doors.

Further, a chubby or fat (more lavish) type of early retirement still looks achievable with a more than $3 million sum, even if a child and home are thrown into the equation. 

Ultimately, it’s up to the individual when they’d like to retire and whether or not it’s their dream to be a homeowner or a parent. Arguably, retiring shortly after the birth of a child is a very smart idea. That way, one can maximize time with the child and not have to worry about daycare.

Of course, if you find yourself in a similar situation, you should take your time and consider chatting with a wealth planner to make sure things go smoothly. Even with millions in the bank, a few errors here and there could prove quite costly over the long haul. 

Raising a child does not come cheap. But $3 million should be more than enough, right?

With the ever-rising costs of living, raising a child has arguably never been higher. Child-related expenses have been incredibly lofty, even burdensome, before the pandemic-fueled inflationary surge.

It could take as much as half a million to raise a child from cradle to college, provided you’re also paying for their education. If you’re hanging up the skates from the workforce this early, the costs of children may just get in the way of your retirement lifestyle at some point down the road.

Of course, a $3.2 million sum is nothing to scoff at. It’s more than enough to fund an early retirement, provided one’s lifestyle isn’t too lavish. Additionally, if a child seeks to be a doctor or lawyer, graduate school could really add up. And if tuition continues soaring unchecked, future education expenses may very well leave a big crack in your nest egg. If more than one child is considered, perhaps the multi-million-dollar sum isn’t so massive if one lives in the big city, where rent prices keep climbing higher.

Despite being what many would consider being “rich” at the young age of 40, the Reddit poster is right to raise the potential for financial road bumps that could arise further down the line.

The bottom line

Ultimately, the decision to have kids and buy a home could mean the difference between a chubby FIRE (financial independence, retire early) lifestyle and perhaps a leaner one. Of course, if one lives in the suburbs and invests wisely, it is possible to have one’s cake and eat it, too, even without having to raise the net worth bar even higher.

In the case of the 40-year-old Redditor, I’d advise them to take their time because they really don’t need to rush into anything. They’ve got the time and the money to ensure a steady cruise for the rest of their lives, provided they play their cards right.

As always, consult a financial expert before you commit to any financial planning decisions.

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