A few weeks back I got an angry email from an occasional reader, complaining that too many articles were about people with $1 million or more. Most people in America have nowhere near that amount, he said. He has a point. So today meet “HugglesGamer,” who is 34, a married father of two, and has a household income of $80,000.
He wants to achieve “FIRE” — i.e., “Financial Independence, Retire Early.” But so far he’s accumulated a 401(k) of just $42,000. But, he adds, he has debts. He owes $8,000 on his credit cards mostly due to “misfortune” with car problems, he says. He has another $8,000 loan. He and his wife owe $8,000 and $4,500 on their car loans. Oh, and he has $12,500 in student debt. “Am I screwed?” he asked in a Reddit subforum. In his situation, he should be worrying less about “early retirement,” and more about being able to retire normally, according to Sandra Gilpatrick, a wealth manager in Boston. “FIRE is a difficult strategy for many people, especially those with debt, children, and an income too low to maximize retirement plan contributions,” she said. HugglesGamer, it seems, has all three. “My advice would be to focus more on building an appropriate cash reserve rather than to worry about FIRE,” Gilpatrick said. “It would help give him the resilience he is lacking for unexpected expenses,” such as his car troubles, she added. Meanwhile, what of his savings? His 401(k) balance of $42,000 may not seem like much — and it is certainly not something that puts him on track for financial independence or early retirement. But even that low amount is ahead of …
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