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Old 06-21-2019, 09:28 AM
 
75 posts, read 134,643 times
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If you have been able to retire early what is the best advice you think someone would need? My husband and I would like to retire early and we know we need income each month coming since it will a while before we can claim social security or start cashing out our 401ks with no penalty. I am 36 and my husband is in his early forties. I would like to completely retire by the time Im 40. Thank you for any advice.
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Old 06-21-2019, 09:56 AM
 
Location: Colorado Springs
4,829 posts, read 4,940,887 times
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Retire 25 years before Medicare?

Good luck with that!
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Old 06-21-2019, 09:59 AM
 
Location: Florida
4,354 posts, read 3,689,532 times
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Know what you are going to do with your time.
Figure out your retirement expenses and increase each year for inflation. Be sure to include medical insurance and taxes in the budget.
Make sure your savings and SS will cover your expenses. I would think you need a few million dollars.
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Old 06-21-2019, 10:10 AM
 
8,815 posts, read 5,119,154 times
Reputation: 10085
Quote:
Originally Posted by teaolive3 View Post
If you have been able to retire early what is the best advice you think someone would need? My husband and I would like to retire early and we know we need income each month coming since it will a while before we can claim social security or start cashing out our 401ks with no penalty. I am 36 and my husband is in his early forties. I would like to completely retire by the time Im 40. Thank you for any advice.
Not so. You can access monies earlier without penalty, but you must follow the rules. Two methods are 72t rules and the Roth conversion ladder.

https://www.madfientist.com/how-to-a...t-funds-early/
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Old 06-21-2019, 10:16 AM
 
1,039 posts, read 483,913 times
Reputation: 1430
-First thing is to track your expenses for a couple years--get a good handle on what you really spend now.


-Given you plan to retire extremely early you definitely want to price out what it will cost you for decent healthcare each year until you qualify for Medicare.


-Think about what your daily activities will be to keep you occupied. Some people are very good with lots of free time and not regimented. Others really struggle.



-I wouldn't get tied to "I need income coming in each month", but rather have an idea on how much you need for living expenses each year and plan accordingly. Stay away from "guaranteed income" products as they are laden with fees and you can reach your cash flow needs by simply selling from an equity or bond portfolio. Also, given you're looking at, barring a tragedy, a 40+ year retirement you want to have your assets in a position to grow substantially ( stocks), unless you have a very large sum where growth is not needed.



Those are my thoughts.
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Old 06-21-2019, 10:32 AM
 
9,181 posts, read 9,263,338 times
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Quote:
Originally Posted by teaolive3 View Post
If you have been able to retire early what is the best advice you think someone would need? My husband and I would like to retire early and we know we need income each month coming since it will a while before we can claim social security or start cashing out our 401ks with no penalty. I am 36 and my husband is in his early forties. I would like to completely retire by the time Im 40. Thank you for any advice.
I hope you have a whole lot of savings. Since you aren't eligible for social security or medicare and you don't want to cash in on your 401K, exactly what source of income do you have?

The average woman lives to be about age 81. If you retire at 40, you are going to have to pay for a lot of years expenses where you are not gainfully employed.

Is this simply wishin' and hopin' on your part or do you have the actual means to retire?
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Old 06-21-2019, 10:42 AM
 
Location: Loudon, TN
5,768 posts, read 4,822,990 times
Reputation: 19382
This doesn't really sound like a plan. You want to retire but don't know where your income will come from for the next 20 odd years until you're old enough for SS and and your 401k? Unless you have a lot of other money invested somewhere, a whole lot of equity in something, or you plan to inherit a million bucks, I don't get it.
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Old 06-21-2019, 11:15 AM
 
Location: the Old Dominion
294 posts, read 148,682 times
Reputation: 1382
Default ...peering through the fog...

Quote:
Originally Posted by TheShadow View Post
This doesn't really sound like a plan. You want to retire but don't know where your income will come from for the next 20 odd years until you're old enough for SS and and your 401k? Unless you have a lot of other money invested somewhere, a whole lot of equity in something, or you plan to inherit a million bucks, I don't get it.
Teaolive3,
take a look at the parts I put in bold on Shadow's post. I do not think you will be ready for retirement when you turn forty. This does not mean not to collect an early pension if you and your spouse get the chance. But you may need to keep working to gain further knowledge about what retirement really is and how to transistion and live in early retirement. Some people retire early and start a new career. Others retire early and go back to work after a short period (a few months to a couple of years). And then there are those who retire early and find they cannot return to the old career or even to the work force.
You are likely a responsible person and at least looking to your future more than most at your age. However, I think you still have some growing up to do (this is not a patronizing remark). Especially on how you view money, time and having a living plan.
While early retirement can be an option for you, I cannot see you being a candidate for an early & permanent retirement.
Good luck. You have plenty of time to think about this.
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Old 06-21-2019, 11:16 AM
 
248 posts, read 64,766 times
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Use Firecalc and it will let you know if financially you are ready.
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Old 06-21-2019, 11:28 AM
 
Location: Near Falls Lake
2,781 posts, read 1,909,728 times
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To retire at that age is far, far more expensive than when you get older! Depending on you individual circumstance you would likely need well over a million dollars to be comfortable. The other issue is what are you going to do? If you sit around and do nothing, things will likely work out poorly for you on a number of fronts. I retired the first time in my 40's after selling my engineering/manufacturing company. After a few years of doing what I wanted to do, I decided to start another company and go back to work. If you enjoy what you are doing, working helps to keep you young.
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