The idea of retiring at 40 sounds almost rebellious. Stop working just when most people are hitting their career peak, and live the rest of your life on your own terms. No bosses, no Monday blues, no waiting for the weekend. But can you do it?
For many working professionals, retiring at 60 feels like a finish line etched in stone. But in recent years, a new goal has quietly gained popularity, retiring at 40.
The idea sounds almost rebellious. Stop working just when most people are hitting their career peak, and live the rest of your life on your own terms. No bosses, no Monday blues, no waiting for the weekend.
But behind this new aspiration, lies a tough question: Can you really afford to stop earning at 40 and still live comfortably for the rest of your life?
IS IT POSSIBLE TO RETIRE AT 40?
Abhishek Kumar, a Sebi-registered investment adviser and founder of SahajMoney, says it is possible but highly challenging. “It depends a lot on how much of your income you save and how your investments grow over time,” he says.
According to him, someone who is 28 years old and aiming to retire by 40 would need to save around 79 times their current annual expenses, after adjusting for inflation. At age 40, that number may be around 35 times.
Nehal Mota, Co-Founder and CEO of Finnovate, agrees. “Yes, it is possible — but only with high discipline and intentional planning. The focus should not just be on earning more, but on saving more,” he says. He believes even those earning a middle-class salary can do it if they consistently save over 50% of their income and invest wisely.
HOW MUCH DO YOU NEED TO SAVE EVERY MONTH?
Let’s take the example of someone earning Rs 1 lakh per month. Abhishek Kumar explains that a 40-year-old with Rs 50,000 in monthly expenses would need to save Rs 18,080 per month just to retire by 60. “But if the goal is to retire at 40, the monthly savings will need to be 60–70% of income or even more,” he adds.
Nehal Mota offers a similar view. “If someone earning Rs 83,000 a month wants to retire by 40, they should save Rs 40,000 to Rs 45,000 each month and invest through SIPs in mutual funds targeting 10–12% annual returns,” he says. Over time, this could help build a corpus of Rs 2–3 crore by 40, which may generate a passive income of Rs 1–2 lakh per month depending on how the money is invested after retirement.
WHAT IS FIRE AND IS IT RELEVANT FOR INDIANS?
FIRE, or Financial Independence Retire Early, is a lifestyle movement that encourages people to save and invest aggressively with the goal of retiring decades earlier than usual. While it originated in the West, it is slowly catching on in India too.
“FIRE is growing among India’s urban professionals,” says Nehal Mota. “It gives people freedom to travel, take sabbaticals, or work on their own terms, without financial pressure.”
Abhishek Kumar, however, warns that the popular 4% withdrawal rule used in FIRE planning may not work as well in India. “That rule is based on returns in developed markets like the US. In India, we should follow a more cautious withdrawal rate of 3.5% or even less due to higher inflation and market volatility,” he says.
COMMON MISTAKES AND RISKS OF EARLY RETIREMENT
One of the biggest mistakes people make is underestimating how much money they’ll need. “Many believe they can retire with a small corpus that gives them Rs 1 lakh per month. But their savings rate is just 1–5% of income — that’s not going to work,” says Abhishek Kumar.
Nehal Mota highlights a few more risks: “People ignore the rising cost of healthcare, overestimate how much passive income they can generate, and assume they won’t need to work again — but many do. Lifestyle creep is also a real problem. As people earn more, they spend more, and this delays savings goals.”
HOW TO DEAL WITH HEALTHCARE, INFLATION AND EMERGENCIES
Both experts agree that managing health and emergencies is critical.
“Start early with health insurance, maintain a proper emergency fund, and save enough to handle inflation through the years,” says Abhishek Kumar. “Early retirees face a longer retirement period, so the risk of market downturns is higher.”
Nehal Mota adds, “Keep a separate healthcare fund, buy a lifelong insurance policy, and make sure your investments offer inflation-adjusted returns. Post-retirement, choose a more balanced asset allocation that offers stability and growth.”
Retiring by 40 is not easy but can be done with commitment, smart investing, and careful planning. The biggest challenge is not income but behaviour – saving enough, staying invested, and being realistic about expenses and risks.
