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The amount you need to retire goes up substantially as you reduce your retirement age. Eventually market forces, inflation, medical costs, maintenance etc would destroy your principal and you would be looking at returning to work 20 years or so into your break which would be very difficult.
You would be stuck chasing very risky, high return assets to try and spin off a decent return. Any market disruption would be quite devastating as you draw down while the bear is feasting.
The numbers look like they could work. Market returns 10%, that is 80k a year. I can live on less than half of 80k a year in a low COL area. While that math has held true for very long periods the problem is when you hit a patch of 3 or 5 years (or more) where returns suck or you are forced to draw down during a 50% downturn and you get a sudden realization the math isn't so simple. Insurance gets progressively more expensive, that house will require updates to the roof, HVAC, appliances etc and you'll need new vehicles. I also assume you want to do something besides sit at home and play on the internet all day.
I won't tell you it is impossible to do it. You could forgo health insurance and make the mad dash to 65 hoping you don't lose the genetic lottery. You could leverage your house and use the money to buy on downturns, juicing your portfolio and or fund yourself should markets take a short term dump. Your needs could be modest, you could live on a farm out in BFE and the only thing you need is to harvest your eggs and green house plants while you sit in the deer stand counting the points on the antlers.
People can live on virtually nothing. That isn't most folks though and trying to cut out in your 30's is far more likely to lead to failure than long term happiness.
One other thing, how much you needs varies tremendously. Some people can barely pay their bills and make 15k a month, others live on 700 a month somewhere cheap and do ok.
Me personally or the average person? The answers will be different for each person due to differences in preferences and family size.
Me personally, I would probably sell the house and move to a place where I can work at a very high risk green energy tech startup, with most of the wealth in mutual funds. If the startup fails, I can just live off the investments until I find the next thing that is more enjoyable than not having a job, which could happen in a few months or might take a long time. With that amount of freedom there would be no need to pre-commit one way or the other, I could explore different options and see what I like best.
Isn't the 4% 'guideline' only for a 30 year retirement horizon?
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