Retire at 30? Save $1 Million on a $55,000 Salary? They Did It
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Lynch_199rtThe Forward-Thinking Budgeter

Christopher Lynch, 58, Gardena, Calif.

Christopher Lynch says he and his wife have “always been the saving type,” as well, even when they were teenagers and earning money by mowing lawns, delivering newspapers or babysitting. After beginning their careers in the early 1980s—she as a registered nurse, he in a technical position at an oil refinery—the Lynches started investing their savings, starting with IRAs.

Today, they have a net worth of more than $1.5 million. “We achieved this through aggressive investing in our retirement accounts, keeping our debt low and not living extravagantly,” Lynch explains. “By ‘aggressive investing,’ I don’t mean risky—most of our investments were in indexed mutual funds—but by allocating more than 25 percent of our salaries to our retirement accounts.”

When Lynch’s wife retired in 2001 at 50, they were each earning about $60,000. Because she’d contributed the maximum amount each year to her employer’s defined benefit plan, she got to start tapping her pension. “After she retired, we were living on her pension and my income, which helped us budget and learn to live frugally,” Lynch says.

Though Lynch’s income had reached $100,000 when he retired in 2014, he was accustomed to living on much less. “During my career, I received regular pay bumps,” he says. “I would typically take the new income and use it to increase my contributions to my 401(k) and continue living on my previous income. It never seemed to be any burden, and consequently, we were able to maintain our standard of living.”

While the Lynches, who have two children, didn’t drive fancy cars, splurge on clothes and jewelry or purchase the latest electronic gadgets, they lived comfortably. “We never felt that we were underprivileged; we just didn’t feel a need to keep up with the Joneses,” Lynch says.

Regular saving and investing is good practice for retirement, Lynch adds. “A hidden benefit of saving and investing so much [is that] once you retire, you have already been used to living on less, so it’s no strain.”

His advice for others: Lynch says two money mantras have kept him on the right financial path. First, to avoid overspending or buying things he doesn’t need, he remembers: “The things that you own end up owning you.”

And to focus on investing rather than accruing debt, he reminds himself of the old saying: “Those who understand the principle of money earn interest; those who don’t, pay interest.”

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May 11, 2016

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