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Retirement at 40: is that even possible?

2022-01-22T15:44:06.246Z


Retirement at 40: is that even possible? Created: 01/22/2022, 16:36 By: Sophia Lother Hobbies and leisure time instead of working life, is that realistic at the age of 40? (symbol photo) © Jens Wolf/dpa Turn your back on your job and retire at the age of 40? An overview of the circumstances under which this is possible. Frankfurt – While the retirement age is also gradually increasing as plan


Retirement at 40: is that even possible?

Created: 01/22/2022, 16:36

By: Sophia Lother

Hobbies and leisure time instead of working life, is that realistic at the age of 40?

(symbol photo) © Jens Wolf/dpa

Turn your back on your job and retire at the age of 40?

An overview of the circumstances under which this is possible.

Frankfurt – While the retirement age is also gradually increasing as planned in 2022*, more and more people want to retire earlier.

Because more time for family, friends and hobbies seems more desirable to many than working until old age.

Retirement at 63 is an option* to dive into retirement earlier.

But for some, that's not enough.

You are working towards retiring* at the age of 40.

But is this even feasible without massive financial losses?

Retire at 40: what are the odds of retiring that early?

Experts agree: Early retirement must be meticulously planned*.

If you retire earlier, the payment of the statutory pension insurance is reduced enormously.

The payment is reduced by 0.3 percent for each month for which a pension is drawn earlier.

So if a person retires four years earlier, that means a loss of 14.4 percent.

These apply in general and are not increased even when the regular retirement age* is reached.

There is also another factor, because when you retire plays an important role in the payment of statutory pension insurance.

This is because the entitlement for employees only exists a maximum of four years before the state-determined entry age.

The fact is: if you want to retire that early, you should be financially in a good position to be able to accept these losses in your old-age provision*.

Retire at 40: What's behind frugalists and the Fire movement

Followers of the frugalist movement abstain* where possible, with the aim of turning their backs on working life at the age of 40 or even earlier.

Not only do you save on the consumption of luxury goods, you only pay attention to the bare essentials when it comes to food and housing.

The low pension is then to be improved with the money saved.

The Fire movement (Financial Independence, Retire Early) has an even sharper focus on retirement.

Here, too, different techniques are used to try to save as much money as possible.

Once the desired retirement age has been reached, the movement's adherents only want to pursue work that really excites them, travel and enjoy life.

But how realistic is that?

Retired at 40: What is needed?

An important factor within the movements is that workers need a job that is as lucrative as possible.

Financial advisor Karolina Decker has compared to Zeit Online calculated the salary at which a pension from the age of 40 is at least within the realm of probability.

She explains that with an average income of 47,700 euros, entry that early is most likely not possible.

"Only those who are already earning a six-figure annual salary by the age of 30 can possibly retire at the age of 40 - mind you without children," she explains to the newspaper.

According to the expert, a passive income, for example through private company foundations such as startups, can also ensure that such an early retirement is possible.

Another important cornerstone of the movements is that as much of the money saved as possible is invested.

For this purpose, conventional shares or ETFs are used, among other things, to provide for the pension*.

The expert describes an example calculation.

If a person over the age of 30 invests 1000 euros in ETFs for ten years, they could secure between 40 and 65 impressive 900 to 1200 euros per month.

However, this calculation is based on a positive market development, the expert told Zeit Online.

Retirement at 40 possible?

That's what experts say

While it is possible under certain circumstances to retire at the age of 40, many early retirees have to pay close attention to their expenses.

Because just because such an early pension is possible, it does not mean that you no longer have to pay attention to the money.

Here, however, frugalists and other movements come in handy with their already practiced routines.

In addition, limited consumption not only benefits your own account, but also the climate.

(slo)

*fr.de is an offer from IPPEN.MEDIA.

Source: merkur

All life articles on 2022-01-22

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