I Asked ChatGPT How to Retire on Less Than $40,000 a Year—Here’s the Plan It Gave Me
A realistic roadmap for retiring by 60 on under $40,000 a year—built around smart budgeting, simple investing, and habits that make a modest income work harder over time.
- Firoz Gill
- 4 min read
For years, I thought retirement was something only high earners could afford. When your paycheck barely stretches to the next month, saving for your sixties feels like a fantasy. So I asked ChatGPT to design a plan for someone making under $40,000 a year who still wants to stop working by 60.
I expected vague advice like “cut coffee and save more.” Instead, it gave me a clear, math-based roadmap — one that proved financial freedom isn’t about how much you make, but how you use what you have.
1. Rethinking What Retirement Looks Like
ChatGPT started by reframing retirement entirely. Instead of one long stretch of leisure, it divided it into phases — each with different priorities and spending patterns. In your early sixties, the “go-go years,” you’re still active. That’s when your budget should lean toward travel and experiences. By your seventies, the “slow-go years,” life becomes more home-based and affordable. And by your eighties, the “no-go years,” activity slows but healthcare costs rise. That simple shift made retirement feel less overwhelming. You’re not funding three identical decades — just adapting to changing seasons of life.
2. The Numbers That Actually Work
Then came the math. Starting with a $38,000 annual income, ChatGPT calculated that saving $300–$400 a month and earning around 7% annually could build $750,000–$800,000 by age 60. At retirement, that could provide roughly $30,000 a year in withdrawals — and adding average Social Security benefits brings total income near $4,000 per month. Not luxury living, but financial security without debt or fear of running out. Even if you can’t save that much right away, the AI emphasized starting small and increasing yearly. Compounding does the heavy lifting.
3. Stretching a Modest Paycheck
The plan didn’t assume I’d magically earn more. It focused on margin — widening the gap between what you earn and what you spend. It suggested cutting the biggest costs first:
Housing: Share rent, downsize, or rent out a spare room.
Transportation: Drive a reliable used car instead of financing a new one.
Food: Batch cook and limit takeout to once a week.
Every dollar saved buys freedom later. And partial retirement — like consulting or part-time work — can stretch savings significantly without feeling like “work” in the old sense.
4. Investing Without Overcomplication
The investing advice was refreshingly simple: skip the trading apps and memes. Stick to low-cost index funds — total market or S&P 500 — and automate contributions through a 401(k) or Roth IRA. Using both pretax (401k) and post-tax (Roth) accounts lets you manage taxes strategically later. When you can decide which accounts to draw from, you can stay in lower tax brackets and preserve your nest egg longer.
5. The Healthcare Reality
Healthcare, ChatGPT warned, is the wild card. Even with Medicare, expect about $6,000 a year per person in premiums and out-of-pocket costs — around $500 a month. Before 65, you’ll need ACA coverage or an employer plan if you retire early. It also noted that roughly 70% of retirees need some long-term care, so it’s smart to plan early — whether that’s buying hybrid insurance or setting aside a separate fund. It wasn’t fearmongering; it was realism. Healthcare is one of the few predictable “surprises” of aging.
6. Building Financial Habits That Stick
Beyond investing, the AI emphasized habit-building:
Create a 6-month emergency fund before maxing out retirement accounts.
Pay off high-interest debt — nothing kills compounding faster.
Track spending to identify leaks.
Rehearse your retirement by living for a few months on what you expect to spend later.
It also reminded me that purpose matters. Retirement shouldn’t just be about escaping work — it’s about choosing what to work on.
7. What I Took Away
What surprised me most was how possible it all felt. This wasn’t a get-rich fantasy — just consistent savings, realistic returns, and intentional living. You don’t need to make six figures to retire comfortably. You need time, structure, and a plan that fits your life, not someone else’s. ChatGPT didn’t promise yachts or endless travel. It promised stability — the kind where bills are covered, choices are yours, and time finally belongs to you. And for anyone earning under $40,000 a year, that’s not just a dream. It’s a plan that starts with your next paycheck.