The 3 ‘stupidest’ myths about early retirement

Wednesday, May 31, 2023

Millionaire who retired at 35: The 3 ‘stupidest lies’ I’ve heard about early retirement

If anyone knows what early retirement is really like, it’s Steve Adcock. In 2016, after years of climbing the corporate ladder, living frugally and investing the cash he saved, he retired at age 35 with about $900,000. 

In the years since, Adcock has pushed his net worth north of $1 million and started the Millionaire Habits newsletter to help others build wealth and reach financial independence. 

Since he retired, “I’ve heard some of the stupidest lies about early retirement from people who will never retire,” Adcock wrote in a recent tweet. Here are the three he hears the most. 

“You’re going to be bored.” This will be true only if you don’t have a plan, Adcock says. Start thinking about how you spend your days before you leave your job. “You need to know what you’re retiring to, not just what you’re retiring from,” he tells CNBC Make It. “If your job is your only hobby, then you have no business retiring early.”

“It’s going to destroy your relationship.” If you spend all day hanging around the house, there is a chance you and your partner could get on each other’s nerves. To avoid this, Adcock suggests finding something to dedicate time to on your own, such as writing a book, training for a marathon or picking up a side hustle you’re passionate about. 

“You’re never going to work again.” Don’t worry about whether you’ll be able to get your old job back, Adcock says. For one thing, you worked to leave that job for a reason. For another, if you’ve retired early, you’re likely to have some skills that will make you valuable in the workforce, “probably in a job or a career that you like better than what you had before,” Adcock says.

Money Tip of the Week: Use a 529 plan to score a tax break while saving for education expenses

With the cost of higher education in the U.S. continuing to soar, investors are increasingly turning to 529 plans – tax-advantaged education savings accounts which allow you to invest money that grows free from federal or state tax, as long as funds are put toward qualified educational expenses when you withdraw them. 

What’s more, some states allow taxpayers to deduct or get a credit for 529 contributions on their taxes. And these accounts are not just for college savers. Here are three ways you can make use of a 529 plan. 

Educational costs from kindergarten through college. You can use up to $10,000 in 529 funds per year to pay for K-12 tuition at private schools. You can also put up a lifetime total of $10,000 per borrower toward student loan payments for the beneficiary or their siblings. 

Trade school and apprenticeship expenses. If a beneficiary decides their career route doesn’t include college, a 529 plan can be used to cover tuition and expenses, including supplies, equipment and fees for qualifying trade schools and apprenticeship programs. 

Roth IRA rollovers. Beginning in 2024, beneficiaries will have the option to roll over some 529 plan funds tax- and penalty-free into a Roth IRA. The 529 plan must be at least 15 years old and rollover funds are subject to annual Roth contribution limits. Beneficiaries can roll over up to $35,000 in their lifetime. 

Next Gen Investing: Learn these 4 terms before investing in A.I.

Businesses and investors alike are bullish on artificial intelligence. 

Some 94% of business leaders say that AI will be critical to the success of their companies over the next five years, according to a recent survey from Deloitte. And analysts from Goldman Sachs believe AI technology could fuel a rise in productivity and drive up S&P 500 profits by 30% or more over the next decade. 

If you’re interested in investing in AI — or anything AI related— make sure you know these four terms first. 

1. Machine learning. This describes a computer’s ability to learn without being explicitly programmed. To do that, algorithms are fed large data sets and trained to identify patterns within each set. In theory, algorithms are then able to apply the same pattern recognition process to a new data set. It’s how Spotify analyzes the music you listen to and recommends similar artists. 

2. Large language model. This type of algorithm learns how to recognize, summarize and generate text and other types of content after processing huge sets of data. Through this process, so-called LLMs learn how to determine the relationship between words and the concepts behind them. 

3. Generative AI. Large language models are a type of generative AI. As the name implies, this type of AI is capable of generating content such as text, video or audio. 

4. GPT. The GPT in blockbuster chatbot ChatGPT stands for generative pretrained transformers. GPT is OpenAI’s large language model that powers the chatbot, helping it produce human-like responses. 

Worth the Money: Sole Protectors — $29.99

As a child, I would often dream about the day I would be able to afford a pair of Jordan sneakers. It wasn’t until junior year of college that I’d saved enough money to buy my first pair, and today, the shoe boxes form a tower in my closet. My sneakers are some of my most prized possessions, and they remind me of just how far I’ve come. So naturally, I want them to stay in good condition for as long as possible.

Sole Protectors, which cost around $30 before shipping, are a thin, adhesive clear film cut into different shapes to match various Nike and Adidas soles. They’ve kept my soles from getting dirty or yellowing after repeated wear, and I no longer worry about removing gum or pebbles from the bottom of my shoes. Installation takes about five to 10 minutes, and I’ve kept my longest pair for over a year. They’re still going strong!

—Ashton Jackson, Associate Success Reporter

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