O-Dark-Thirty

In the last Retire Early post , I went over my formula for determining if you can retire now. If you can, that's great! We'll cover some of the headaches associated with retiring early in a future post. For the rest of you, let's talk about getting ready to retire early. The key to retiring early is saving enough money to do so.   That sounds easy, doesn't it? Some people get jobs that pay well. Some wait to hit it big with the lottery. Just for information, according to statistics, lottery winners declare bankruptcy at twice the national average .  I agree with many of the other experts on early retirement, though. The key to retiring early is to reduce your expenses. Let's look at a breakdown of expenses for a family making $50K a year. Caveat: I believe in supporting my church and the work it does, so I always build a ten percent tithe into my budgets. That's reflected in these numbers. If there are children, some of these numbers mus...

I follow a number of retirement blogs that focus on early retirement, and a few on other retirement options (mostly overseas). It occurred to me that others might not only be looking for good blogs (besides mine ;). Joe Udo's blog Retire by 40 is one of my favorites. Joe consistently lays his finances out there for everyone to see, which is genius if you ask me. And brave. I don't know his real name (if it is in the blog, I missed it) but the blog of Mr. Money Mustache is awesome and full of mind-blowing concepts - like smarten up and spend less. Except he's a bit more cranky about it - and twenty years younger than I am. I just started reading Justin's blog at Root of Good and I can tell I'll be spending some time reading the back posts. Fascinating guy with a lot of good ideas on retiring early. His experiences don't parallel mine, so for me it's entirely new insights. He says he gets about 50,000 pageviews a month! Wow. I'll admit now that ...

Can you currently afford to retire? I'll give you my answer now, so you don't need to read the rest if you don't want to.  Take your current savings and divide it by your yearly cost of living.  That's the back of the envelope way to calculate how many years you can survive without working. If your calculation can get you to age 70 or so, you're probably good. It can be more complicated than that, but that's the basic formula I use. If you can afford to retire now, then handling retirement becomes your next job. That will take a while, so relax, and get used to the idea of making your retirement work. We'll discuss that in a future chapter. If you can't afford to retire yet, then you need to do some planning - and we'll look at that soon, too.  Right now, let's see what it takes to retire in the USA in today's current economy. *** Have you saved $2.4 million US dollars? You read that right. That's what some pundits say it t...