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We were both working and always tried to save one income. We retired at 50. The trick is not how much you make but how much you spend.
I get the point of that "it's not what you make but what you spend" quote, but it's really too binary for me. A majority or a large minority of people really do make enough to retire at 55 if they want, but some people really do need to increase their incomes.
The new car every few years is crippling. I bought a new car at 27 financed for six years. I'm 29 now and wanting to buy my first house, and then this car is a yoke around my neck. Years and years of car payments will kill retirement hopes.
So pay it off early, or give up the 2BR apartment for a 1BR. You can probably afford anything you want, just not everything you want.
I'd add one more important something to strive for in preparing for an early retirement, or any retirement for that matter....take care of yourself. Be active, learn to handle stress, and I think most importantly, eat healthy. Lots of whole fruits and vegetables. Unless one gets lucky and falls outside of the bell curve, I've seen decades of unhealthy lifestyles catch up to most people around me just when they were ready to enjoy their retirement, and more than a few before retiring. And it makes financial sense as the odds rise sharply that you won't be spending money on taking meds/visiting Dr.'s....who has time for that in retirement anyways?
I think this bears repeating. We hear from so many people that they'll be in bad health by the time they're ready to retire, so why not live it up now? We also hear about how medical costs are so high...but I wonder how many of these people are really making serious efforts to eat healthy and exercise.
In my experience from reading early retirement blogs, most early retirees who didn't receive inheritances:
--Had above average (but not fabulous) incomes while working.
--Often were engineers/computer programmers (as opposed to doctors/lawyers). This profession tends to attract a very frugal personality type that knows the difference between a true need and a want and generally doesn't care about what other people think.
--Are practically always married to a like minded frugal spouse. The spouse may not have been that way initially, but were "converted" early in the relationship/marriage.
--Usually have only one or no kids.
--Divorce & out of wedlock child bearing are rare among this group.
--Unless they were in super lucrative careers (i.e. finance in NYC), they usually did not live in the most expensive cities/metro areas.
--As mentioned in a previous post, most early retiree bloggers write about the importance of living a healthy lifestyle. I doubt any of them are fat or obese. The self discipline it takes to be financially independent at a young age spills over into many aspects of life.
^^ Yep. Most options would likely depend on income....duh, no brainer.
But it sure would easier to retire early on 200K...and a hell of a lot less likely on 40K.
Some incomes are just subsistence level -- PERIOD. Not much early retirement planning on THAT income.
Then again one controversial and interesting post elsewhere was titled "Live the GOOD LIFE on 20K."
Boy.....the conversations and entries that were posted about that.....
In my experience from reading early retirement blogs, most early retirees who didn't receive inheritances:
--Had above average (but not fabulous) incomes while working.
--Often were engineers/computer programmers (as opposed to doctors/lawyers). This profession tends to attract a very frugal personality type that knows the difference between a true need and a want and generally doesn't care about what other people think.
--Are practically always married to a like minded frugal spouse. The spouse may not have been that way initially, but were "converted" early in the relationship/marriage.
--Usually have only one or no kids.
--Divorce & out of wedlock child bearing are rare among this group.
--Unless they were in super lucrative careers (i.e. finance in NYC), they usually did not live in the most expensive cities/metro areas.
--As mentioned in a previous post, most early retiree bloggers write about the importance of living a healthy lifestyle. I doubt any of them are fat or obese. The self discipline it takes to be financially independent at a young age spills over into many aspects of life.
--They usually spend less time watching TV, movies, & doing Facebook, etc. They focus their time on living with real people in the real world, not the virtual worlds of TV & the internet.
Rule of thumb: If you start at zero, you will need a 50% (after tax) savings rate to retire in 15-20 years. You will need a 30% savings rate to retire within 25-30 years.
Last edited by mysticaltyger; 06-06-2015 at 01:46 PM..
I get the point of that "it's not what you make but what you spend" quote, but it's really too binary for me. A majority or a large minority of people really do make enough to retire at 55 if they want, but some people really do need to increase their incomes.
^^ Yep. Most options would likely depend on income....duh, no brainer.
But it sure would easier to retire early on 200K.
Yet most folks in households bringing in 200K aren't retiring at 55 or younger.
Quote:
Originally Posted by rdflk
..and a hell of a lot less likely on 40K.
I don't make much more than 40K, but I am well into the 6 figures for my investment portfolio. The most I've ever made is 52K, but I make less than that now due to a 12% pay cut 4 years ago. I also live in the high cost SF Bay Area. You can do a lot with 40K if you want to. Granted, making more is generally better, but I find that people vastly underestimate how much they could really save if they wanted to. It's like Mr. Money Mustache says...."the typical American lifestyle is an exploding volcano of wastefulness" and I concur.
I expect to retire in 10 or 11 years at 55 or 56 (assuming we don't have World War 3 or another Great Recession/Depression--all of which are possibilities that I don't ignore). Granted, I am eligible to retire with a pension at 55, but I expect my investment income, at a conservative 3% withdrawal rate, will come close to matching the pension income.
Like the gal at Afford Anything says. You can (probably) afford anything you want. You just can't afford everything you want. So decide what is most important to you now. Maybe the saving of 30% of after tax income it takes to retire by 55 isn't for you. Just be sure to OWN that choice and not shift the blame to others if things don't work out as planed (i.e. you lose a good paying job in your 50s and aren't able to replace it, yet don't have enough to retire on).
Quote:
Originally Posted by rdflk
Some incomes are just subsistence level -- PERIOD. Not much early retirement planning on THAT income.
No question about it. But as many early retirees maintain, what's considered subsistence has a large degree of subjectivity to it.
Quote:
Originally Posted by rdflk
Then again one controversial and interesting post elsewhere was titled "Live the GOOD LIFE on 20K."
Boy.....the conversations and entries that were posted about that.....
And that may be quite feasible in a lower cost metro area. Mr. Money Mustache has a wife & 1 kid and they spend just over 25K per year in Colorado (higher end of medium cost range). Of course, their house is paid off...so 20K per year for a single person or couple with no kids with a paid off house in a lower cost area could be quite reasonable.
...
And that may be quite feasible in a lower cost metro area. Mr. Money Mustache has a wife & 1 kid and they spend just over 25K per year in Colorado (higher end of medium cost range). Of course, their house is paid off...so 20K per year for a single person or couple with no kids with a paid off house in a lower cost area could be quite reasonable.
A family earning $25k here is well above the average household income level, regardless of how many children they are raising.
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The only person I see "spouting off" is you.
