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Message
Early Retirement
Posted on 4/28/16 at 8:35 pm
Posted on 4/28/16 at 8:35 pm
Has anyone successfully planned an early retirement?
I'm still 20+ years away from eligibility with my current employer, but my current 10 year plan should have me with sufficient savings (albeit within 401k/IRA), and a paid for house (axles and everything....)
The main question I have is finding a suitable investment vehicle to draw from between the time periods in which I could retire early, and the age in which I could legally draw from my retirement accounts. I would still freelance for some income, but I want the freedom to work when and where I want.
The only thing I have come up with is withdrawing principle from IRA's, but that has a limited life.
I'll hang up and listen. ...
I'm still 20+ years away from eligibility with my current employer, but my current 10 year plan should have me with sufficient savings (albeit within 401k/IRA), and a paid for house (axles and everything....)
The main question I have is finding a suitable investment vehicle to draw from between the time periods in which I could retire early, and the age in which I could legally draw from my retirement accounts. I would still freelance for some income, but I want the freedom to work when and where I want.
The only thing I have come up with is withdrawing principle from IRA's, but that has a limited life.
I'll hang up and listen. ...
This post was edited on 4/28/16 at 9:09 pm
Posted on 4/28/16 at 10:31 pm to dragginass
I've been thinking about the same thing. The best I've come up with is Roth contributions (pre-59.5), real estate, and just plain taxable.
Posted on 4/29/16 at 7:24 am to dragginass
Have a job you enjoy, then it's a nonissue.
Posted on 4/29/16 at 7:29 am to dragginass
quote:
paid for house (axles and everything....)
Tires will dry rot on your doublewide the longer it sits. Plan for that.
I'm doing the same thing. I'm 51, plan to retire at 55. I'm basically in the mode of saving 4.5 years of expenses to bridge me to 59 1/2. That is my plan. Luckily for me, my wife is already retired with a pension, and we can jump on her health insurance when we want to. Right now, we are on mine. I have to allow for that as well, and am planning on that cost to be $1500/month.
The good news is I don't have to make this decision now, will make it when I'm closer to 55. The insurance will be my main indicator of retiring early.
Posted on 4/29/16 at 7:34 am to foshizzle
I do enjoy my job. That doesn't change my plan, but thanks.
Posted on 4/29/16 at 8:18 am to dragginass
For many the economic crashes over the past couple of decades have pushed retirement down the road. It takes years to recover from economic damage we have seen in the last 8 years
Posted on 4/29/16 at 8:40 am to dragginass
I would love to do this, but my wife wouldn't be happy with the savings % necessary for it.
Posted on 4/29/16 at 8:47 am to bwallcubfan
What I've been doing hasn't been overly drastic. Depending on your company match, maxing out your 401k annually for 20yrs can easily make you a 401k millionaire. Get your house paid for, and at that point you're sitting pretty.
Posted on 4/29/16 at 11:28 am to dragginass
quote:
maxing out your 401k annually for 20yrs can easily make you a 401k millionaire
And that will give you an income of $40,000 a year before taxes if you don't want to outlive your income, even less if you retire early.
Posted on 4/29/16 at 12:27 pm to Layabout
quote:
And that will give you an income of $40,000 a year before taxes if you don't want to outlive your income, even less if you retire early.
I wouldn't draw from a 401k until eligible. Hence the question in my OP. 401k would continue to grow untouched after I early retire. Additionally my wife would still be working,and her employer health coverage in place on our family.
Posted on 4/29/16 at 12:47 pm to dragginass
Have you looked into a 72t SEPP? This could get you around the 10% penalty if you retire early at around age 55. I believe it lasts for 5 years and ends at age 59.5. Whichever is longer.
LINK
LINK
Posted on 4/29/16 at 3:41 pm to dragginass
Find the house that you want to live in until you die. Make a mortgage deal that will be paid up when you're 55. Your decrease in income will be mitigated by the lack of a mortgage so that your disposable income remains the same forever. I did it. But it takes a savings mentality and wise investments.
Posted on 4/29/16 at 4:01 pm to Zach
First off, I'd realistically think of a budget you want in retirement. When you don't go to work everyday, your expenses drop quite rapidly actually. A ton of the things you paid for like oil changes can start to cost 50% or less. If you want to, you eat out less, drive much less, and have more time for things like yard work and house maintenance.
2ndly, why retire completely? If you don't have to work, you know how easy it is to just make $15k a year? You could work at a retail store you enjoy like a lowes, bass pro, etc. that is low stress for 10-20 hours with 12 weeks off a year to help pay your bills until you are 60.
What about owning and renting real estate? It is low tax investment and you can own it in an LLC and open a SEP or Simple IRA to put a large amount of your income into for retirement.
2ndly, why retire completely? If you don't have to work, you know how easy it is to just make $15k a year? You could work at a retail store you enjoy like a lowes, bass pro, etc. that is low stress for 10-20 hours with 12 weeks off a year to help pay your bills until you are 60.
What about owning and renting real estate? It is low tax investment and you can own it in an LLC and open a SEP or Simple IRA to put a large amount of your income into for retirement.
Posted on 4/29/16 at 5:29 pm to baldona
quote:
First off, I'd realistically think of a budget you want in retirement. When you don't go to work everyday, your expenses drop quite rapidly actually. A ton of the things you paid for like oil changes can start to cost 50% or less. If you want to, you eat out less, drive much less, and have more time for things like yard work and house maintenance.
I think this is a common myth, people are living longer and staying healthy for a larger part of that time. The image of puttering in the yard watching some TV and then nap time, is long gone. Based on my life in retirement and dozens of others I know, we drive just as much or more as when we were working because we now have the time to go places often there is the additional cost of air travel, and hotels. We eat out probably more because we are home less or just want to. Then there are new expenses like the boat or RV you bought for retirement. The last thing any retired person I know wants to do is yard work and home maintenance, or even just sit at home, the kids are gone, we are free, time to live it up. Needing 100% or more of your pre retirement income is pretty common.
Posted on 4/29/16 at 7:13 pm to EA6B
quote:
The last thing any retired person I know wants to do is yard work and home maintenance, or even just sit at home
This is exactly what I look forward to doing most in retirement. Having the time to enjoy these kinds of things, the slower pace, to notice things and to just be still. To each his own I suppose, but I plan to live very well on $50k or so a year. House will be paid off and I won't need to invest anymore.
Posted on 4/29/16 at 10:05 pm to dragginass
I think about it daily. And I'm only 41 and still a long way to go. I've been working for the same company since 1997. The wife and I do pretty well, great for Mississippi standards. The house should be paid off in 8yrs, however we have a soon to be 7yr old and 5yr old. I just don't see myself making it until the kids graduate from college. But the wife is 5yrs younger than me, makes about the same as I do and has a much higher income potential than I'll ever have. I can see me hanging it up in my mid 50's.
Posted on 4/30/16 at 4:09 am to GCTigahs
Yep pretty easy, joined the Army at 19 and have invested 10 - 15% of what I've made. Since the years they paid for me to go to college don't count for retirement though I'll be 43 not 39 when I hang it up. :cheers:
Posted on 5/1/16 at 8:55 am to dragginass
quote:
Has anyone successfully planned an early retirement?
Check out firecalc.
Posted on 5/1/16 at 9:33 am to dragginass
Retired at 57, am now 60. Work part time to stay busy and to have monopoly money. Have a pension which will continue if I should pass before my wife. We reworked our insurance coverages, paid all debt (house, credit cards, school loans on children, etc) and banked/invested the rest. Still have one car note which could go away today. We live a conservative lifestyle but do the things we enjoy without worry.
Posted on 5/1/16 at 9:40 am to dragginass
quote:
Has anyone successfully planned an early retirement?
I'm semi retired now at 38. It's kind of funny now that I think about it. I did not plan for it. It just kind of happened. But my way is not conventional way.
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