How This Single Mom Lived By The 25x Rule And Retired Early With $1.3M In The Bank

Jackie Cummings Koski never earned more than $80,000 per year, yet was able to retire at 49 with $1.3 million in savings and investments.

Koski, now 51, is a member of the FIRE movement (Financially Independent, Retire Early). But she wasn’t always so wealthy.

She and her five siblings were raised by a single father, and money was “always scarce," she told CNBC. "We barely made it. We barely scraped by.”

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As a single mother to a daughter, Koski felt that she didn’t have the time to search for other employment opportunities, but always had a “nagging feeling that I never wanted to be back in poverty again." She always wanted to be "smart with the money that she had versus thinking that having a higher income was going to be the thing that got (her) ahead.”

How Koski Retired Early

Instead of switching jobs or finding a second job, the former account manager at data analytics firm LexisNexis took advantage of her employer's retirement plan, contributing 7% of every paycheck into her 401K. The amount was matched by her employer, and by the time Koski was 46, she had accumulated enough savings to retire.

To calculate the amount needed, Koski used the "25x rule" — she determined what her annual expenses were and multiplied that number by 25. Because her annual expenses amounted to between $40,000 and $45,000, this meant she would need to accumulate about $1 million before being able to retire.

Koski reached her goal when she was 46, but to have "a little more of a cushion," she worked for three more years and wound up with $1.3 million in savings and investments.

Today, Koski no longer has the daily stress of going to work and is able to spend her time doing things she enjoys without having to limit her spending to only essentials, according CNBC.

“I feel like I have so much more opportunity because I don’t have the stress of work,” she told the publication.

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