I am 31 years old and I haven't exactly been a responsible financial adult. I have absolutely nothing saved for my retirement, and about 60k worth of debt. Most of my debt is High interest loans, above 10%, so investing is currently off the table until I pay them off fully. But once I do that, I wish to start investing for my retirement.
I live in the US – so I'm trying to figure out whether I should plan on doing the typical 401k – Roth 401k – or just take the money and stick it in an Index Fund from a regular investment account.
The 401k plans have the incentive of tax-free withdrawals once I'm 60, but I might want to retire at 50 instead of working until I'm 60 – and I found out that there is a 10% penalty if I withdrawal funds from a 401k early.
Once I'm debt free, I'm basically planning on Speed Running my way to AT LEAST 1M in investments, and then live off the interest it generates. (Assuming a 7% return, I think I could live off 70k a year, and retire with that and be more than happy)
My main question / point – I don't want to be forced to work until 60 to gain the benefits of a 401k – so should I even bother using one, or should i just go with something like the S&P500?
Edit: Thank you to everyone who has taken the time to educate me. I realize 401k is an account and Index Funds are an investment now. I now realize that 401k can be withdrawn early without penality when im ready to retire. Very helpful people here!
EDIT 2: Thank you to all the wonderful, helpful people who have provided me great feedback and referred me to articles / resources that are informational. I will definitely be starting my 401k and additionally, a Roth IRA, the day i turn 32. Max contributions, and then ill take the rest and go with a normal brokerage account. Ill start pulling out of my 401k when I'm 50, taking 4.3% – which will allow me to dodge the penalty – and then i can focus on working for myself!
To the ones who had nothing helpful to say, and basically just said “he aint gonna make it” – It wasn't very helpful. I make the salary to make this all possible, i wouldn't have wasted my time posting if it wasn't possible. i just need to stop my BS spending! If i don't make enough, ill make more. If I'm spending too much, ill find a way to spend less. This is all extremely feasible for me!
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