Most married professionals could retire at age 55 if they just saved 10% of their income- right? (cash, payment)
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If you start working at age 22 after graduating from college, have a moderately successful career, are married and you and your spouse invest 10% of your income for 33 years, in an index fund, that mirrors the S&P 500, until you are 55, you should be able to retire comfortably at age 55.
(This assumes a starting salary of $20,000 a year 33 years ago, and a 3% pay increase each year for 33 years and both husband and wife putting ten percent of their gross pay each year in this index fund since 1982.)
I did the math and the couple should have at least a million dollars after 33 years of working. (Based on the income and the results of the S&P 500 Index Fund since 1982) This does not include any income from a pension or the sale of their home after 33 years of real estate equity.
Why don't more people do this and retire from full time work at age 55?
I would venture to say many people in this category do have a million or more invested but most feel that's not enough to retire at 55.
775k at a 4% withdrawal rate would yield you 31k/yr. Not great, but definitely doable if you have no mortgage, car payments, etc. and you don't need to pay for many expenses associated with work life (commuting cost, clothes, networking outings, lunches, etc.).
This is true but we live in a high tax area. Even if you don't have a mortgage those ever increasing taxes can be an issue. I pay in taxes what I used to pay in rent. It's still doable but it's something to think about. Government always thinks that the money well (people's wallets) is deeper.
Qualitatively, the standard of living has increased in the intervening 20 years. For example, back during the Clinton years -- you know, when Al Gore invented the Internet -- few people actually had internet access, and those who did had 14.4 dial-up modems while the wealthy had 28K dial-up modems. Nowadays, many poor people have smart phones with 10 gigs a month -- and that is somehow considered a necessity by the social engineers.
Al Gore invented the Internet... Ba ha ha ha they guy's so full of himself.
People live better today than a rich man lived the last generation yet they still complain.
What you know might not be the normal distribution though, according to this in 2013 30% of homeowners 65 and older still had mortgage debt, if you backed up that age range by 10 years I'm pretty sure it would be at least half of those 55 and older
Actually today's people's auto's cost more than people's houses. Of course they didn't make as much money but then again the more you make the more they take.
Yes! This worked for us and my brother's family.
I am 56 and has $963K as of the end of Sep-15, in 4 ex employers 401K plans.
My spouse is older and has a much higher balance as he had rolled over his 401K plans into an IRA and did some trading on his own.
We both have always contributed to the maximum amount allowed our entire working life so we never knew we had the money and never felt that we missed anything. We are by nature not materialistic people, and have always lived comfortably below our mean. Our 2 children have been our largest expenses and our home is paid off.
My brother and his wife are in the same situation.
I am surprised that no one has posted that this strategy works for them. Perhaps we are just a quiet, contented lot. I would not have posted for fear of people thinking i am bragging. But I think that someone ought to voice that, YES, saving early works wonders.
Well, in my younger days, I was too dumb, you may have even defined me as someone with a slight liberal mindset. Now I could be paying the price but something in me changed, I grew up and now I'm good.
Actually today's people's auto's cost more than people's houses. Of course they didn't make as much money but then again the more you make the more they take.
Your post doesn't actually make sense and even trying to read between the lines it doesn't appear to have anything to do with what I posted. If you would like to try again please do so
This is true but we live in a high tax area. Even if you don't have a mortgage those ever increasing taxes can be an issue. I pay in taxes what I used to pay in rent. It's still doable but it's something to think about. Government always thinks that the money well (people's wallets) is deeper.
If you live in a high tax area you can always move, maybe you don't want to do so, maybe you don't want a possible loss in income but it's an option still
If you live in a high tax area you can always move, maybe you don't want to do so, maybe you don't want a possible loss in income but it's an option still
We already did move. Because we bought in a lower tax county we were able to get more house for our money and now we are mortgage free. The taxes were much higher in that county and people are fleeing. Now our governor wants to raise state taxes. We plan on moving again. People are fleeing this state too.
This is true but we live in a high tax area. Even if you don't have a mortgage those ever increasing taxes can be an issue. I pay in taxes what I used to pay in rent. It's still doable but it's something to think about. Government always thinks that the money well (people's wallets) is deeper.
Yeah, I'm not saying it can work for everyone everywhere. In fact I would want more and if this were me I would probably try to hold out until 60-62, I'm just saying what the OP is suggesting is certainly possible.
Where I live, if I didn't have a mortgage, car payments, or expenses associated with work my monthly budget (for 2 adults) would probably look like this.
Total before healthcare: $1,615/month
Or about $19.4k/yr.
Assuming we want to travel and up our expenses by 9k/yr for that. An income of 28k for 2 adults aged 55 would qualify you for a silver plan under ACA for $124/month or 1.5k/yr.
This would bring our total expenses to just under 30k/yr.
Last edited by mizzourah2006; 11-04-2015 at 08:52 AM..
Yeah, I'm not saying it can work for everyone everywhere. In fact I would want more and if this were me I would probably try to hold out until 60-62, I'm just saying what the OP is suggesting is certainly possible.
Where I live, if I didn't have a mortgage, car payments, or expenses associated with work my monthly budget (for 2 adults) would probably look like this.
Total before healthcare: $1,615/month
Or about $19.4k/yr.
Assuming we want to travel and up our expenses by 9k/yr for that. An income of 28k for 2 adults aged 55 would qualify you for a silver plan under ACA for $124/month or 1.5k/yr.
This would bring our total expenses to just under 30k/yr.
Uuuummmm... there are a huge number of things missing, at least based on my life experience. Many worldly possessions have a finite lifespan, especially anything with a motor/pump/valve/gasket/etc. There is maintenance and/or replacement that needs to be planned for. And even with ACA there are sizable deductibles, so unless your plan is to never need medical attention you need to have something budgeted for this.
At age 75 one might reasonably expect to never again be replacing cars, furnaces, mattresses, etc, assuming they are in servicable condition. But at age 55???
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