How to retire at 55 instead of 65 or 70.
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RedNeckGeek
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I'm 61 now and retired at 54. I had two jobs after I graduated from college. The first was with GE in their Nuclear Energy Business Group. That went bust with the Three Mile Island accident, after a year. The next job lasted another 29 years. They sent me on for a master's degree, gave me opportunities for three different careers, and now I'm enjoying health insurance and a pension from them. In college I picked a career based on the potential to stay employed at a high salary, and that's what happened. Probably one of the best decisions I ever made, all because of encouragement and guidance from my dad.
I always put enough into the retirement plans to get 100% of whatever was available from the company matching funds. I always saved anything that was left over at the end of the month as well.
When there was a choice, I put that money to work in well managed mutual funds; Contra was the biggest one for a while, but that strategy was made to change as times changed.
Early on I figured out I was a guy that worked to pay bills and enjoy the time away from work. I did the best I could with what I had while on the job, but it was never my goal in life to work and it didn't bring the kind of happiness that my time off activities did. So an early goal was to quit working ASAP.
For me it all revolved around what it cost to support myself. So I started keeping track of expenses by watching where my money came from and where it went. I developed a list of cost centers, like "home & vehicle maintenance", "mortgage", "utilities & household", "licenses, income tax, property tax", "savings" and even "fun money" and "vacation". It was a lot of work by hand, but once I saw Quicken demonstrated at a trade show, it became much, much easier.
In the early days, most of the money went to paying for a house. A couple of years before the purchase I used my budget data to figure out how much mortgage I could afford and started putting the mortgage payment into savings. When it was 20% of a house price, I found a fixer-upper with a mortgage payment the same size as I had been saving and bought it. It was a wreck, so I continued living in a rented bedroom until, working evenings and weekends for about six months, I was able to move in. All my houses have also been purchased used, and all of them have been fixer-uppers. Sweat equity has figured largely in my savings plan, as did luck. The Bay Area Rapid Transit system was extended to my little bedroom community a few years before I retired, and that drove real estate prices through the roof. That meant I could sell my second home for almost double what I'd paid for it ten years before, even in a down real estate market.
I bought my first new car when I graduated the first time from college, and had it paid off in two years. Bought two new pickup trucks after that as my daily drivers. The first one was a Ranger that developed intake deposits in the first year of ownership. The Ford dealers couldn't/wouldn't fix it under warranty, so it got traded for a Toyota that I drove for another ten years. It was followed by a 4Runner that I drove for another ten years before buying my used F250 when I retired. Along the way I wasted big bux on a luxury BMW 540i that spent as much time at the dealership as it did with me in it. Nice car when it ran, but I was too worried about the big insurance premiums and somebody dinging the door in a parking lot to really enjoy it. Had I to do over again, I'd stick with used vehicles with very good reviews and drive them until they started needing water and power steering pumps, alternators, and major transmission work. That said, though, I replaced all those on the F250. It came to me with well over 100,000 miles on it, but I also paid about 25% of the price of a new one and had plenty of time and money to deal with the needed repairs.
Early in my career I started travelling for the company, about two weeks out of every month. Since they were feeding me, money that wasn't spent for groceries and utility bills went into savings.
The job also came with four weeks of vacation time a year, most of them spent riding and camping off of a motorcycle. Very inexpensive way to travel, and I got to see a lot of country, always in the back of my mind thinking about a place to retire.
Like most folks, I got hooked up with an "investment advisor" through my financial institution, in this case, a credit union. I didn't know much about money, but it was during the tech boom, and almost anything worked in the stock market. So that's where he put all my savings, and encouraged me to do the same with the 401K. In '08 this nut case named Jim Cramer started screaming about pulling any money out of the stock market you'd need in the next five years. I talked to the advisor about it, and was told Cramer was a crock. But Cramer was also talking about diversification, and helping people understand what stocks and bonds are, so I bought his first book and started to understand the huge emotional component that shapes the ups and downs of the stock market. Shortly before the crash in '08, I moved everything but 20% of my holdings into REITs and bonds, leaving about half of that in cash. That one move probably moved my retirement date up a good ten years.
Just like I'd done with the houses, I used my financial data and budget to figure out what my spending would look like in retirement. I also spent a lot of time understanding what the pension payment would be based on the retirement date, and what potential Social Security income would look like. I put a spreadsheet together with this info, and updated it yearly as my salary changed. I also started looking in earnest at potential retirement locations, having already established that the pressures of urban life were too much to take after I quit working. When the real estate bubble popped in '08, I was as stunned as anyone but thanks to Cramer's advice was still in pretty good financial shape. But the big drop in real estate prices and with foreclosures and short sales all over the place, I got serious about the real estate market and started combing listings in the areas in which I was interested. When I found this place (which was a short sale), I used the spreadsheet to determine what I could afford and made a low ball offer on it. It was initially rejected, but when I came back with the same offer "best and final", it was accepted. That triggered my two week retirement notice at work, and I've been up here ever since.
A few things I've learned in retirement:
Even living on a fixed pension, I tend to not to watch my expenses as closely. I've stopped entering transactions into Quicken, for example. My monthly expenses are pretty constant, I watch the credit card statements for fraudulent charges, and I've continued with my frugal vacation and entertainment spending. Over all those years, I've trained myself to weigh the cost/benefit of every purchase, and a steadily increasing overall balance at the brokerage house says that so far what I'm doing is working. Quicken was a good tool for training me into those habits, but the habits continue even without Quicken.
I've also stopped the almost day trading habit I was into for a few years after retiring, chasing "buying opportunities" on "good companies" and looking instead for "damaged stocks". In most years, the S&P 500 beats even the best mutual fund managers, and even hedge fund managers have trouble doing better. So these days most of my stocks are held in a low fee ETF that tracks the S&P 500, and I'm using all that time I wasted tracking buys and sells to work on old motorcycles and do some more travelling.
I got married to my first wife at 18, and that mistake ended when I was 20. After that, all the travelling I was doing didn't leave much time for a wife, so I stayed single, dating on and off but not really finding the right woman. Once I retired at 54, I had the time to devote to a relationship, and thought I had the right gal, but there's more to marriage than I could figure out and that one ended, too. The financial impact wasn't that great because all of my income was generated by a pension and portfolio proceeds that I'd brought into the marriage, and so were beyond her gold digging reach. The attorney fees were not trivial though, and I don't recommend divorce to anyone unless it's an absolute last resort. No regrets about any of it, though, other than as some have mentioned of finding the right woman the first time around.
Not having kids probably went a long way toward being able to retire early, but the downside is I also don't have much of a safety net for when I'm no longer able to care for myself. There's no such thing as a sure thing in life, and even happily married folks with kids have no guarantee that they won't outlive all of those relatives. That happened to the boyfriend my mom found after my dad died, as the geography between us got in the way of establishing any kind of family like relationship. I still helped him when I could, and got him through his end times and settled his estate, but mostly he was alone after mom's death. So going forward is something I'm trying to plan for, putting together a migration strategy to a more urban location when I can no longer take care of this place, and finding an attorney or agency that can be trusted to manage my financial affairs when I no longer have the mental capacity to do so. I've already had one bad experience in that area, so I've got more homework to do there.
This has gotten far longer than I'd intended, but I think the biggest component to early retirement has been planning. Understand your finances and manage them according to your plan. Let that plan dictate your job choices and especially how you spend and save. If your money isn't going toward your goal, you're not making any progress toward those goals. Life doesn't last forever, and the sooner you become financially independent, the sooner you can begin enjoying life to its fullest.
I always put enough into the retirement plans to get 100% of whatever was available from the company matching funds. I always saved anything that was left over at the end of the month as well.
When there was a choice, I put that money to work in well managed mutual funds; Contra was the biggest one for a while, but that strategy was made to change as times changed.
Early on I figured out I was a guy that worked to pay bills and enjoy the time away from work. I did the best I could with what I had while on the job, but it was never my goal in life to work and it didn't bring the kind of happiness that my time off activities did. So an early goal was to quit working ASAP.
For me it all revolved around what it cost to support myself. So I started keeping track of expenses by watching where my money came from and where it went. I developed a list of cost centers, like "home & vehicle maintenance", "mortgage", "utilities & household", "licenses, income tax, property tax", "savings" and even "fun money" and "vacation". It was a lot of work by hand, but once I saw Quicken demonstrated at a trade show, it became much, much easier.
In the early days, most of the money went to paying for a house. A couple of years before the purchase I used my budget data to figure out how much mortgage I could afford and started putting the mortgage payment into savings. When it was 20% of a house price, I found a fixer-upper with a mortgage payment the same size as I had been saving and bought it. It was a wreck, so I continued living in a rented bedroom until, working evenings and weekends for about six months, I was able to move in. All my houses have also been purchased used, and all of them have been fixer-uppers. Sweat equity has figured largely in my savings plan, as did luck. The Bay Area Rapid Transit system was extended to my little bedroom community a few years before I retired, and that drove real estate prices through the roof. That meant I could sell my second home for almost double what I'd paid for it ten years before, even in a down real estate market.
I bought my first new car when I graduated the first time from college, and had it paid off in two years. Bought two new pickup trucks after that as my daily drivers. The first one was a Ranger that developed intake deposits in the first year of ownership. The Ford dealers couldn't/wouldn't fix it under warranty, so it got traded for a Toyota that I drove for another ten years. It was followed by a 4Runner that I drove for another ten years before buying my used F250 when I retired. Along the way I wasted big bux on a luxury BMW 540i that spent as much time at the dealership as it did with me in it. Nice car when it ran, but I was too worried about the big insurance premiums and somebody dinging the door in a parking lot to really enjoy it. Had I to do over again, I'd stick with used vehicles with very good reviews and drive them until they started needing water and power steering pumps, alternators, and major transmission work. That said, though, I replaced all those on the F250. It came to me with well over 100,000 miles on it, but I also paid about 25% of the price of a new one and had plenty of time and money to deal with the needed repairs.
Early in my career I started travelling for the company, about two weeks out of every month. Since they were feeding me, money that wasn't spent for groceries and utility bills went into savings.
The job also came with four weeks of vacation time a year, most of them spent riding and camping off of a motorcycle. Very inexpensive way to travel, and I got to see a lot of country, always in the back of my mind thinking about a place to retire.
Like most folks, I got hooked up with an "investment advisor" through my financial institution, in this case, a credit union. I didn't know much about money, but it was during the tech boom, and almost anything worked in the stock market. So that's where he put all my savings, and encouraged me to do the same with the 401K. In '08 this nut case named Jim Cramer started screaming about pulling any money out of the stock market you'd need in the next five years. I talked to the advisor about it, and was told Cramer was a crock. But Cramer was also talking about diversification, and helping people understand what stocks and bonds are, so I bought his first book and started to understand the huge emotional component that shapes the ups and downs of the stock market. Shortly before the crash in '08, I moved everything but 20% of my holdings into REITs and bonds, leaving about half of that in cash. That one move probably moved my retirement date up a good ten years.
Just like I'd done with the houses, I used my financial data and budget to figure out what my spending would look like in retirement. I also spent a lot of time understanding what the pension payment would be based on the retirement date, and what potential Social Security income would look like. I put a spreadsheet together with this info, and updated it yearly as my salary changed. I also started looking in earnest at potential retirement locations, having already established that the pressures of urban life were too much to take after I quit working. When the real estate bubble popped in '08, I was as stunned as anyone but thanks to Cramer's advice was still in pretty good financial shape. But the big drop in real estate prices and with foreclosures and short sales all over the place, I got serious about the real estate market and started combing listings in the areas in which I was interested. When I found this place (which was a short sale), I used the spreadsheet to determine what I could afford and made a low ball offer on it. It was initially rejected, but when I came back with the same offer "best and final", it was accepted. That triggered my two week retirement notice at work, and I've been up here ever since.
A few things I've learned in retirement:
Even living on a fixed pension, I tend to not to watch my expenses as closely. I've stopped entering transactions into Quicken, for example. My monthly expenses are pretty constant, I watch the credit card statements for fraudulent charges, and I've continued with my frugal vacation and entertainment spending. Over all those years, I've trained myself to weigh the cost/benefit of every purchase, and a steadily increasing overall balance at the brokerage house says that so far what I'm doing is working. Quicken was a good tool for training me into those habits, but the habits continue even without Quicken.
I've also stopped the almost day trading habit I was into for a few years after retiring, chasing "buying opportunities" on "good companies" and looking instead for "damaged stocks". In most years, the S&P 500 beats even the best mutual fund managers, and even hedge fund managers have trouble doing better. So these days most of my stocks are held in a low fee ETF that tracks the S&P 500, and I'm using all that time I wasted tracking buys and sells to work on old motorcycles and do some more travelling.
I got married to my first wife at 18, and that mistake ended when I was 20. After that, all the travelling I was doing didn't leave much time for a wife, so I stayed single, dating on and off but not really finding the right woman. Once I retired at 54, I had the time to devote to a relationship, and thought I had the right gal, but there's more to marriage than I could figure out and that one ended, too. The financial impact wasn't that great because all of my income was generated by a pension and portfolio proceeds that I'd brought into the marriage, and so were beyond her gold digging reach. The attorney fees were not trivial though, and I don't recommend divorce to anyone unless it's an absolute last resort. No regrets about any of it, though, other than as some have mentioned of finding the right woman the first time around.
Not having kids probably went a long way toward being able to retire early, but the downside is I also don't have much of a safety net for when I'm no longer able to care for myself. There's no such thing as a sure thing in life, and even happily married folks with kids have no guarantee that they won't outlive all of those relatives. That happened to the boyfriend my mom found after my dad died, as the geography between us got in the way of establishing any kind of family like relationship. I still helped him when I could, and got him through his end times and settled his estate, but mostly he was alone after mom's death. So going forward is something I'm trying to plan for, putting together a migration strategy to a more urban location when I can no longer take care of this place, and finding an attorney or agency that can be trusted to manage my financial affairs when I no longer have the mental capacity to do so. I've already had one bad experience in that area, so I've got more homework to do there.
This has gotten far longer than I'd intended, but I think the biggest component to early retirement has been planning. Understand your finances and manage them according to your plan. Let that plan dictate your job choices and especially how you spend and save. If your money isn't going toward your goal, you're not making any progress toward those goals. Life doesn't last forever, and the sooner you become financially independent, the sooner you can begin enjoying life to its fullest.
/pine
Super Star Member
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Know it's a different division but they continued to make bomb triggers for nuclear weapons...
In the mid 90's he was the biggest pump and dump artist in the history of the Internet...
This guy was for real though: Gilder Telecosm Forum
kc5dlo
Gold Member
I am 57 and it looks like I am retired. Been putting the max into 401k's since it became an option. One thing that I am hearing now instead back then is to only invest what the company matches in a 401k and invest the rest in a Roth IRA. Part of the reason for me wanting to retire a little early was to be able to enjoy life. I will likely spend as much as in my early years of retirement as when I was working. The idea was always that in retirement you will be spending less money thus be in a lower tax bracket. I would have been better off if I had paid the taxes up front and then let the money grow tax free.
Are you kidding? I must be doing something wrong. I am 66 and have been retired for 11 years. Only income is my retirement and social security and I pay more fed tax than when I was working. Hopefully, Trumps Tax Plan will help next year.
Are you kidding? I must be doing something wrong. I am 66 and have been retired for 11 years. Only income is my retirement and social security and I pay more fed tax than when I was working. Hopefully, Trumps Tax Plan will help next year.
jeff9366
Super Star Member
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- Jan 14, 2011
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- Tractor
- Kubota Tractor Loader L3560 HST+ ~~~~~~~~~~~~~ 3,700 pounds bare tractor, 5,400 pounds operating weight, 37 horsepower
So many letters in just two words.
I am schwozzled!
I am going to look up both words in my dictionary.
Yes, so funny it HURTS!
Gary3032
Member
Anybody want to throw some rough numbers out for what you would be comfortable with in savings. Read some place the otherday where they recomend only drawing out 4 % a year to last you for 30 years.
I realise everybodys situation is different and may have different lifestyles.
A few things that I would recommend.
15 year mortgage and then pay extra on it monthly.
Pay your credit cards off monthly.
Get a credit card that pays you for using it.
I have one that sends me a check every year. This year it is around 650.00.
Keep a good Fico score, some states in can affect your insurance rates.
Don't ride 7500 shares of Bank stock from 20 dollars a share down to 4.50!:thumbdown:
If money is tight, try to track where EVERY penny goes for a couple of months. You will find out what to cut out of your spending.
Gary
I realise everybodys situation is different and may have different lifestyles.
A few things that I would recommend.
15 year mortgage and then pay extra on it monthly.
Pay your credit cards off monthly.
Get a credit card that pays you for using it.
I have one that sends me a check every year. This year it is around 650.00.
Keep a good Fico score, some states in can affect your insurance rates.
Don't ride 7500 shares of Bank stock from 20 dollars a share down to 4.50!:thumbdown:
If money is tight, try to track where EVERY penny goes for a couple of months. You will find out what to cut out of your spending.
Gary
NPurdy1112
Silver Member
More great information everyone. Glad to see some real life stories instead of click bait articles on websites with the same copy and paste information.
Our pension is 20 years to be vested. Not a typo. This is the standard for the police and fire pension in Indiana. Sure wish the years of service were lower like Florida and some other states, but I cannot complain.
Didn't mean to start any credit card back and forth. I am at full responsibility for the debt and I know I could have done better during those times. Have been paying extra on them each month to get back to where I should be. For some reason I just don't want to use them in the future. Could be lack of self control or just going simple with cash, I don't know. Of course I will keep a credit card around for emergencies.
Our pension is 20 years to be vested. Not a typo. This is the standard for the police and fire pension in Indiana. Sure wish the years of service were lower like Florida and some other states, but I cannot complain.
Didn't mean to start any credit card back and forth. I am at full responsibility for the debt and I know I could have done better during those times. Have been paying extra on them each month to get back to where I should be. For some reason I just don't want to use them in the future. Could be lack of self control or just going simple with cash, I don't know. Of course I will keep a credit card around for emergencies.
