- San Francisco
- Age: 47
- Retired at 44
While most people try to save a fixed amount before retirement, Syd took a different approach to early retirement and looked at her costs instead. "I've never believed in calculating your retirement nest egg based on a percentage of your annual income," says Syd, who regularly blogs about retirement. Instead, she calculated that her postretirement expenses would be 65% of her preretirement spending. After three years, she found it was an accurate estimate -- often, she has spent a bit less.
It took Syd 15 years to build a nest egg 33 times her total projected annual costs. With this amount of money, she has been able to withdraw 3% of her savings -- which means she will not run out of money as long as her investments perform well. She actively tracks her portfolio and rebalances her investments when they underperform.
Syd has followed different strategies to build her investments and make them last. Before retirement, she invested aggressively in stock funds to increase her net worth as quickly as possible. Now she is more conservative, with more than 30% of her portfolio in cash and the rest in diversified mutual funds.
- San Francisco
- Age: 36
- Retired at 33
Jacob named his website "Early Retirement Extreme," where he describes his philosophy and financial strategy. After working in academia for five years, Jacob decided to quit.
This was possible because of his aggressive savings strategy. While working, Jacob saved nearly 80% of his after-tax income by eschewing a consumerist lifestyle. Then he began managing his own investment accounts.
"If you're retiring at my age, it's because you prefer time more than money, which is a somewhat rare attitude in this day and age," Jacob told Bankrate last winter. "Fortunately, I've learned to live quite well on little money." He cut costs by using a bicycle instead of a car, eating at home and enjoying low-cost activities.
Jacob lived on about $7,000 a year -- $1,000 of which went to sports hobbies, while the rest covered his basic expenses. He described himself as a conservative investor who focused on nongrowth, dividend-yielding stocks, and he tried to withdraw less than 3% of his portfolio annually.
After more than four years in retirement, Jacob recently returned to work as a quantitative analyst for an investment firm. He credits his early retirement for giving him the financial independence to pursue a job that he loves. But technically, by his own definition, he is no longer retired.
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I took early ( I'm 60) retirement this year- I stayed with the same company 20 years because it had a pension plan, put money into a 401k, and other investments- put money into my house unlike many of my neighbors who used their house like an ATM machine-
I wasn't able to buy a house till I was in my 50's- so I also paid 5 times what my parents paid for their first house- but I didn't buy a mansion- I made do with a fixer upper- I didn't have to have granite counter tops and walk in closets- but as I could afford it I updated the kitchen and bathroom- and paid cash- no credit
I hear so much whining about the economy but I see young people with children dining out at 9 at night. I see young people who can't "live" without the latest gadgetry. I see driveways full of new cars and motorcycles, atvs. trailers boats you name it- stop whining and toughen up- if you can't afford it- don't buy it-
Stop watching television. Go out and do things instead of watching others do it on TV. Life should not be a spectator sport.
Get out of debt now, and stay out. You will be amazed at how much money that you give away in interest for buying something you obviously couldn't afford to begin with.
Invest modestly and wisely. Acquire low load and no load funds. Don't trade often. Lean towards a buy and hold strategy. Frequent trades just makes your broker money, not you.
Make friends that like to do the same things you do. You can often split the cost.
In retrospect I should have gone out at 52 or 53. Life is truly sweet and I'm loving every minute of my retirement.
I was paying sixty dollars a week or more to commute to work and that's just for gas. Now I spend about fifty dollars a month. My medical insurance is my biggest expense, about five hundred a month and I work on a contract basis now and then to keep my Social Security from dropping below a certain level. I have a ways to go, five years to date, before I can collect.
After sixty three, I shouldn't have to do that anymore as I should have about fifteen thousand a year added to my retirement from Social Security and a couple of years later, medicare will help with insurance. Most importantly, I work on my own time frames.
I look forward to taking this summer real easy and hang out at the Southern California beach I live so close to. There will be a lot of rose smelling and sun screen in my future. Again, I'm not wealthy, but I did all of my stupid spending in my youth and now. I keep cars until they quit. I have a jeep that I putter around in and will drive it until it falls apart.
I don't think I've seen a post so full of victims. I can't because of this, I won't succeed because of that, I don't or didn't make enough money because it, screw the other guy because he has more than me....whaaaaa.
If you don't like your situation...change it. YOU are in control of your future not the government, the banker, your boss, the economy or whatever. Sometimes things suck....grow a pair and figure out how you will over come it. Or sit back, blame anyone else but yourself, and grow accustomed to suckling on the government teat.
How to retire early without a fortune...the lead in couple, Bob in AZ, '...combined with the inheritance of a modest estate from his parents, has given him a comfortable retirement.'
Well, there you have it from MSN...some great advice...wait for your parents to croke and hope they have 'a modest estate' to pass to you...
Personally I have no plans to retire I have a modest 401K and a few bucks in Fidelity and USSA I will be 67 June 13th and thanks to the good Lord I am healthy. I draw My SS and work full time. I feel anyone that has lived the medeium income life don't have a prayer in hell to retire. I am a veteran and they are even cutting back on their coverage. So don't try to paint a pretty retirement picture for people.
The people in the profile are clearly childless. I'm a 57-year-old single mother with one child, working as a scientist for the federal government (which, btw, no longer offers the posh retirement everyone seems to think -- just a 401k, social security, and a small annuity). When not working full time, I sell liquidated Bloomingdale's clothing on both eBay and Amazon. And still, I'm unable to make ends meet.
It doesn't help that I pay nearly $10,000 in property taxes (for a small craftsman bungalow) to ensure that our precious teachers and state employees get 80% of their salary when they retire. If only I'd known back in the 1970s, when I was earning my bachelor's degree, that the students too dumb to major in anything except elementary ed would be making out like bandits. I have a PhD, and some of these retard teachers are making more than me. For about 9 months of work per year. Screw that.
If you're not a retired teacher or state employee drawing on your gold-plated pension at the expense of all the rest of us, the only real option is to move to Panama or Costa Rica . There are American, English, and Canadian communities of expatriots there, so even those of you who are unable or unwilling to learn Spanish will do fine. The governments of both countries are particularly interested in you retiring there if you open a small business that helps local communities. And don't buy the bullsh*t about it being too dangerous to live in these places. The corporate elites WANT you to be afraid to leave the US because they need for you to be a good little consumer, pay their taxes for them, and continue to buy their junk.
The key to a comfortable retirement is to have your home paid for before you retire. I retired at 59 and have totally enjoyed the last 7 years of retirement.
Obviously these people are not raising children and sending them to college.
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