Retiring Early

Sunday, January 28, 2007

Extreme Early Retirement

If you haven't read about Billy and Akaisha Kaderli of retireearlylifestyle.com before, you probably should to understand what is possible with early retirement. While they are definitely on one side of the spectrum, but hearing their story will make you think a little differently about retirement.

They retired in their late 30's (they're now 54) on about $500,000, and did so by only spending about $24,000 per year. How the heck did they do that?? Here's how they did it:
  • Simplify. A complicated lifestyle costs more.

  • Look beyond the border. An attractive lifestyle can cost much less in many countries outside the U.S.

  • Track your spending. And figure out where to cut. This is your life now, not a vacation.

  • Pursue low-cost entertainment, such as hiking, bicycling and reading.

I like many of the ideas here, including living outside the US for periods of time and also pursuing low-cost entertainment. Personally, however, I don't think I could cut my expenses down to $24k per year. It's amazing that they are able to live on that, even with some of the low cost places they have been living.

My current spending plan for retirement calls for about $60k per year, including allowances for taxes and a small annual buffer. How much will you need to cover your annual expenses in retirement?

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6 Comments:

  • At 1/28/2007 6:53 PM, Blogger mOOm said…

    I only spent $25k last year, but my girlfriend spent another $20k probably. So no way could we live on $25k - we live in pretty cheap locations.

    Here is a related post:

    http://moominhouse.blogspot.com/2007/01/dont-worry-so-much-about-saving-enough.html

     
  • At 1/29/2007 1:54 PM, Blogger fin_indie said…

    Lets call that a $45k annual expense requirement. :)

    The quesiton is, do you expect to spend more, less or roughly the same in retirement?

    I'm currently spending a bit more now than I expect to in retirement. I'm very clearly paying more for convieniences than I should be, but my time is also very precious right now. In retirement, I should have all the time in the world, so I can scale back a bit.

     
  • At 1/29/2007 4:17 PM, Blogger mOOm said…

    At this point in life I might even spend more if I had more time to travel etc. But research shows that old retirees spend less and less during retirement on average.

    If I had a child expenditure would also rise. And at this rate I'm going to be at least 65 before they'd be in college.

    Well anyway the idea of saving for retirement doesn't fit my mindset or situation at all. I need anyway to get my green card before deciding if I can get by without my current job.

     
  • At 1/30/2007 9:46 PM, Blogger StealthBucks said…

    Hey fin. Thanks for checking out my cellar. I am proud of it but less so of my hobby/slash obsession. If you like wine and good local people. check out David LeClaire's local events. They are fun and informative. Perhaps, I will see you there incognito. Just ask for Stealth :-)

     
  • At 2/01/2007 8:05 PM, Anonymous bluntmoney said…

    We're on track toward reducing our expenses below that level right now, although they're pretty close to it already.

     
  • At 2/02/2007 7:52 AM, Blogger fin_indie said…

    Stealth: Yeah, I'll have to look into David's evens. I am definitely doing more in wine circles this year. I realize now that I was drinking sub-par wine about 2 years back and I stopped drinking it altogether last year. (Man, what a shame!). The passion was re-ignited after drinking some good stuff from the modest little cellar of mine.

    Blunt: Unbelievable on the expense level. Congrats on that. I have to assume you don't have kids, right? I, like moom don't have kids, and would imagine it would be impossible to do with kids.

     

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