A social media user went viral after sharing how she’s planning to ‘soft retire’ in her 40s
A money-savvy social media user who wants to “soft retire” in her 40s has explained how she plans to reach her goal. Mia McGrath, a London-based creator who regularly posts about personal finance and investing, explained her plan in a TikTok video.
Posting on her popular account @miarosemcgrath, Mia captioned the video: “How I plan to become work-optional in my 40s.” Mia claimed: “I’m set to soft retire in my early 40s. So at the moment, I’m 24 with £70k in savings, but my goal is to get to £875k by the age of 40, and that’s because this is the amount that I need invested in order to live off my investments passively.”
The creator, who stated she was not giving financial advice and told viewers to do their own research, explained her reasoning. “So, how did I get to this number?” she said.
“Well, it’s based on the 4% rule, which is where you can withdraw 4% of your portfolio every year without running out of money, and that’s because the global stock market on average returns 10%, but you can bump it down to 8% because of inflation.
“So if you withdraw 4% you’ll still be left with some growth. So having £875k saved and invested at this time would allow me to have a £35k salary completely passively.
“In order to achieve this, I need to save £1,300 every single month for the next 16 years.” Mia acknowledged she’s set herself a challenging target but shared that she’s currently on track to hit her goal
“When I was living at home, I was doing this automatically because it’s what I would have spent on rent and bills, but now that I’ve moved out it is a little bit more difficult, but I’ve managed to achieve this through side hustles and I’ve been saving this if not more every single month.”
The creator added that she expected commenters would tell her £35,000 wouldn’t be enough for her in the future. “It may be worth less in the future, but I’d rather have that than nothing, and not only that, I said soft retire, not fully retire,” she reasoned.
“In my 40s, I’m still going to be living life and perhaps working on personal projects. It would just mean that I have total financial independence and freedom.”
In another video, Mia explained why she’s planning her soft retirement. The creator explained it’s not because she hates her job or wants to sit around all day. Instead, she wants to have the freedom to support herself financially while working less, giving her more control over her time.
“Of course, it depends on your personal finances, your income, expenses, and obligations,” said Mia. “If you have dependents or bigger financial commitments, it might be hard.” However, Mia is happy that her plan works for her.
