I Asked ChatGPT How To Retire by 50 on a Middle-Class Income — Here’s What It Said
Written by
Laura Beck
Edited by
Levi Leidy
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Retiring by 50 sounds like something only tech millionaires or Wall Street executives can pull off. But when I asked ChatGPT if regular people with middle-class incomes could do it, the artificial intelligence (AI) had a detailed plan that didn’t require winning the lottery or inheriting money.
The short answer? Yes, but it requires starting early and being more aggressive with savings than most people are comfortable with. Here’s ChatGPT’s complete strategy.
Define What Retirement Actually Means to You
ChatGPT started with a reality check. Retiring at 50 doesn’t necessarily mean never working again. The AI asked me to think about what I actually wanted: complete financial independence or just the freedom to work only if I wanted to.
“Do you want to fully stop working? Or just gain financial freedom to work only if you want to?” ChatGPT asked.
This distinction matters because it changes how much money you need. If you want to travel the world and never work, you’ll need more than someone who wants the option to do passion projects or part-time work.
ChatGPT suggested estimating annual retirement spending first. For most middle-class retirees, that’s somewhere between $40,000 and $60,000 per year.
Calculate Your FIRE Number
ChatGPT introduced the concept of a “FIRE number” — the total amount you need saved to retire early. FIRE stands for financial independence, retire early.
The formula is simple: multiply your annual expenses by 25.
So if you need $50,000 per year in retirement, you’d need $1.25 million saved. This is based on the 4% rule, which assumes you can safely withdraw 4% of your savings annually without running out of money.
ChatGPT explained that this rule comes from historical stock market returns and is designed to make your money last through market ups and downs.
Save 30% to 50% of Your Income
Here’s where ChatGPT got aggressive. The AI said early retirement requires saving 30% to 50% of your income, which is way higher than the typical 10% to 15% most financial advisors recommend.
For someone making $60,000 per year, that means saving $18,000 to $30,000 annually. On an $80,000 salary, you’d need to save $24,000 to $40,000.
Yes, ChatGPT acknowledged this sounds extreme but then went on to explain why it’s necessary. “Not sure you can hit those savings rates? We’ll get creative below,” the AI said.
The math is straightforward: If you want to retire in 25 years instead of 40, you need to save more aggressively during your working years.
Invest Everything You Save
ChatGPT was clear that parking money in regular savings accounts won’t work for early retirement. The AI recommended using tax-advantaged accounts first, then moving to taxable investments.
The priority order ChatGPT suggested was:
- 401(k), especially if your employer offers matching
- IRA or Roth IRA
- HSA (which works as a retirement account after age 65)
- Taxable brokerage accounts for money you’ll need before 59½
For investments, ChatGPT recommended broad, low-cost index funds like total stock market funds or S&P 500 ETFs. The AI assumed a 7% average annual return, which is based on historical stock market performance.
Focus On the Big 3 Expenses
ChatGPT said most people waste time optimizing small expenses while ignoring the big ones. Instead, focus on housing, transportation and food — which typically eat up 60% to 70% of income.
The AI suggested house-hacking (renting out a room or buying a duplex), driving reliable used cars instead of upgrading frequently and cooking at home more often.
“Shaving off just 10% to 20% makes a huge difference,” ChatGPT explained.
For example, if you spend $3,000 monthly on these three categories, cutting 15% saves you $450 per month or $5,400 per year. That’s significant money for your retirement accounts.
Eliminate High-Interest Debt
ChatGPT was adamant about paying off credit card debt and other high-interest loans before focusing on investing. The AI also warned against lifestyle inflation as income grows.
“Avoid debt like the plague” and “living below your means is your best weapon,” ChatGPT advised.
This makes mathematical sense. If your credit cards charge 20% interest but your investments return 7% annually, you’re guaranteed to lose money by investing before paying off debt.
Track Everything Ruthlessly
ChatGPT recommended using tools like Empower, Mint or You Need a Budget to monitor progress. The AI said tracking net worth and investment growth keeps you motivated and helps you spot problems early.
“These tools help you track net worth, investment growth and spending habits,” ChatGPT explained.
Regular tracking also helps you adjust if you’re falling behind your goals or find opportunities to save more when your income increases.
The 25-Year Example
ChatGPT provided a specific scenario: someone starting at age 25 with a $70,000 income who saves and invests $25,000 annually.
Assuming 7% average investment returns, they’d have $1.3 to $1.5 million by age 50. That’s enough to support the $40,000 to $60,000 annual spending ChatGPT suggested for middle-class retirement.
The AI emphasized that starting early makes a huge difference because of compound growth. Someone who starts at 35 instead of 25 would need to save much more to reach the same goal.
Build Multiple Income Streams
Beyond just saving from your main job, ChatGPT suggested building other income sources. Side hustles, rental property or dividend-focused investments can accelerate your timeline.
The AI also mentioned that early retirees often pay very little in taxes by using smart withdrawal strategies during their low-income retirement years.
The Reality Check
ChatGPT’s plan is mathematically sound, but it requires significant lifestyle choices that many people aren’t willing to make. Saving 30% to 50% of your income means living on much less than you earn for decades.
The AI also asked me to give it my specifics to make a custom plan suited for me. So, if that’s of interest to you, head over to ChatGPT and let it know your exact situation for a custom plan. Happy early retirement!
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