I Asked ChatGPT How To Retire With No 401(k): Here’s What It Said
Written by
Brooke Barley
Edited by
Zuri Anderson
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If you don’t have any money saved in a retirement account, you’re far from alone. According to Gallup, 40% of Americans do not have money in any sort of a retirement account.
Though putting money in a 401(k) plan or similar is the most common way of saving money for retirement, it’s not the only way. For alternative methods to a retirement account, here’s what ChatGPT recommended.
Rethink Retirement
There is a traditional view of retirement being in your 60s, relaxing and fully done with employment. However, you don’t have to conform to tradition. According to ChatGPT, another way to think of retirement is, “How can I achieve financial freedom?”
This can mean solely working part-time, or monetizing hobbies, so work feels less demanding. If you don’t want to work, ChatGPT suggested adapting to a lifestyle where you can live off your current savings.
Build Assets That Pay You Back
Another source of income to live off is investments. ChatGPT recommended investing in avenues like real estate, dividend stocks, exchange-traded funds (ETFs), bond ladders or certificates of deposit (CDs). Even if you can’t afford to buy another home, you could rent out a part of the home you live in for either Airbnb or the long-term.
If you do decide to invest in the stock market, ChatGPT said to automate your investments. This way, your amount will compound over time, providing you with more money to live off.
“Automate contributions monthly into a low-cost index fund portfolio (like VTI, VXUS, BND),” ChatGPT said.
Reduce Expenses for Flexibility
Lowering your overhead costs might be something you can do now that allows you to forego full-time work.
Ways to do this, according to ChatGPT, included relocating to an area with a lower cost of living, living in an RV or tiny home or cutting expenses like subscriptions, insurances and car loans. If you don’t have a lot of health issues right now, ChatGPT also said to prioritize preventative care now to stay in good shape.
“Medical costs are often the biggest surprise in retirement,” according to ChatGPT.
Creative Strategies
Though these suggestions from ChatGPT are more gradual plans over time, it also listed a few other methods that you could act on faster if they apply to you. If you’re over 62 and own a home, ChatGPT said you could do a reverse mortgage to get cash quickly. However, you’ll have to repay that cash if you move out or sell the home.
If you know of others looking to retire, ChatGPT said you could move in with them. This way, you could share expenses and have companionship at the same time. You might even be able to share a car and other high-priced items to lower costs even further.
With that said, make sure to assess your plans with a financial advisor before you solidify them.
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