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Author: bgnap Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 736550  
Subject: Feasibility of Early Retirement Date: 7/4/1999 3:03 AM
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Question:

Well, scenario first- my husband (32 y/o) and I (28 y/o) have been thinking more and more lately about early retirement. Especially after familiarizing ourselves with this board! We earn roughly 90k a year. At this point in our financial lives, we are still cleaning up our credit cards messes and should have those taken care of by November of next year. After that point, we will have a healthy amount left over every month to invest (we've learned our lesson about overspending and are doing really well with budgeting these days). Our goal is to have the hubby retire at 40 and myself at 41. I have a pension plan at work that'll kick in when I'm 50 and the hubby has a 401K with about 15k in it right now.

NOW, the questions:
1) Come fall of next year when we intend to aggressively start our 'early retirement nest egg', do we opt for mutual funds??? (We have our son's college money in the Janus fund.) Stocks??? Do we do it via an IRA???

2) Also, we intend to pay down our mortgage early as we have 25 years left at 9%. This way we won't have to worry about a mortgage payment in retirement... thoughts???

In terms of our plans, we only have about a decade or so left before we'd like to retire...is it even feasible to consider retiring so early considering we're just now beginning to plan seriously??? Our calculations are that we'll make approx. 300k in initial contributions to our retirement portfolio within the next decade to live off of during retirement...are we totally off in Lalaland on this early retirement thing??? Please enlighten us...

Any and all info will be greatly appreciated and thanks in advance for the expert guidance,
BGnAP

p.s. sorry for the long post but these questions have been keeping me awake at night...AAARRRGGGHHH...
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Author: messerb One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 112 of 736550
Subject: Re: Feasibility of Early Retirement Date: 7/5/1999 12:57 PM
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bgnap,

You are asking good questions to get you started down the path. Here are my thoughts.

1) Come fall of next year when we intend to aggressively start our 'early retirement nest egg', do we opt for mutual funds??? (We have our son's college money in the Janus fund.) Stocks??? Do we do it via an IRA???
Many Fools would recommend that you take control of your investing performance and ditch the mutual funds. The Foolish Four is a great 4 stock way to beat the performance of the vast majority of funds. Read here for information on the 13 steps to investing Foolishly:
http://www.fool.com/School/13Steps/13Steps.htm
Then read here for information on the Foolish Four:
http://www.fool.com/school/dowinvesting/dowinvesting.htm
Then, hit the Dow Investing/Foolish Four board. Read the FAQ and the back posts from all the folks who are just starting before posting your questions. Check it out at:
http://boards.fool.com/Messages.asp?id=1030001005677004

On the IRA question, I would recommend fully funding your 401k first -- get your company match, if there is one. A fifty cents match, or even a 25 cents match is guaranteed money that you don't want to leave on the table. Then, after you've maxed out his 401k ($10,000 per year with 1999 caps), then fund your IRAs ($2,000 per year for each of you). Hit the Retirement Investing board for info on a Roth v Traditional IRA:
http://boards.fool.com/Messages.asp?id=1040013002935001

2) Also, we intend to pay down our mortgage early as we have 25 years left at 9%. This way we won't have to worry about a mortgage payment in retirement... thoughts???
If you plan to stay in your home for a while (say more than 4 or 5 years), I would highly recommend refinancing your loan down to the 7% - 7.5% fixed rates that are available.

Personally, I would not pay down the mortgage early. I would take the "extra" money and invest it in a stock portfolio. The question to consider is "can I get a better return in the market than the 7% 'return' of paying down the mortgage debt?" The answer is most often yes with these historically low mortgage interest rates.

In terms of our plans, we only have about a decade or so left before we'd like to retire...is it even feasible to consider retiring so early considering we're just now beginning to plan seriously??? Our calculations are that we'll make approx. 300k in initial contributions to our retirement portfolio within the next decade to live off of during retirement...are we totally off in Lalaland on this early retirement thing??? Please enlighten us...
Yes, you can get to $300K in your timeframe. I used Quicken to calculate the following:
- 13 years of saving (28 now, retire at 41)
- $15K initial balance
- $300K target balance
- 12% yield (lower than backtested returns of Foolish 4)
- Requires $11,510 per year saved (including 401k matching contributions)

But will that be enough for your spending levels/needs? Many recommend that one withdraw not more than 5% of the total balance for annual living expenses. Determine what your minimum expenses will be (add some back in for the fun things that you plan to do while in retirement), and multiply by 20. That resultant number should be your early retirement target.

It can be done. Many of the regulars on this board have retired early (e.g., intercst who retired at 38, I believe) and will probably chime in.

Good luck to you!

messerb


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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114 of 736550
Subject: Re: Feasibility of Early Retirement Date: 7/5/1999 6:12 PM
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I agree with most of messerb's comments.

I've always been a little suspicious of using a 5% withdrawal rate in retirement. For someone with a 77% stock/23% fixed income portfolio and a 40 year pay out period, a 5% per year inflation adjusted annual withdrawal has only an 82% chance of surviving to the end of the 40 year pay out period. (See the Retire Early Study on Safe Withdrawal Rates at the following link:

http://www.geocities.com/WallStreet/8257/restud1.html

An 18% chance you'll die broke may be more risk than some people are willing to accept.

The odds improve if you use a 4% inflation adjusted withdrawal. But then a $300,000 nest egg will only fund $12,000 per year in expenses.

intercst

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Author: bgnap Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115 of 736550
Subject: Re: Feasibility of Early Retirement Date: 7/6/1999 7:03 AM
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I think there was some confusion regarding the numbers I provided in my first post. My hubby and I hope to make initial contributions of $300K to our retirement portfolio over a decade or so and then hopefully (we'll keep our fingers and toes crossed) we can get a decent (???) return of 10% or so on that. Given those circumstances and the magic of compounding we should have upwards of $500K by the time we retire. I've read on TMF site but I can't recall exactly where, that you should allow a savings nest egg of 170K per 10K a year you wish to have during retirement. Our goal is to live off of 30K and we're, therefore, hoping to save around $500-510K. After taxes, job expenses and daycare our current 95K yearly income is a lot closer to half that amount; we feel 30K, albeit in future dollars, shouldn't be too hard for us to get by on.

Does this sound a bit more reasonable???

Thanks for reading,
BGnAP



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Author: rhecker One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116 of 736550
Subject: Re: Feasibility of Early Retirement Date: 7/6/1999 9:10 AM
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After taxes, job expenses and daycare our current 95K yearly income is a lot closer to half that amount; we feel 30K, albeit in future dollars, shouldn't be too hard for us to get by on.

I was just wondering a couple things - How much do you get by on today? Are you thinking that taxes, job expenses, and daycare will go away without being replaced by something else when you retire?

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Author: bgnap Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119 of 736550
Subject: Re: Feasibility of Early Retirement Date: 7/6/1999 4:29 PM
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<<I was just wondering a couple things - How much do you get by on today? Are you thinking that taxes, job expenses, and daycare will go away without being replaced by something else when you retire?>>

Excellent point. We can only hope we continue to be Foolish enough to know not to spend beyond our means and limited income in retirement. The past year or so has been a real eye-opener for us in that respect, and as I mentioned in my first post we have learned our lesson (the HARD way) about the pitfalls of overspending :-(.

BGnAP

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 120 of 736550
Subject: Re: Feasibility of Early Retirement Date: 7/6/1999 4:50 PM
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bgnap asks,

I think there was some confusion regarding the numbers I provided in my first post. My hubby and I hope to make initial contributions of $300K to our retirement portfolio over a decade or so and then hopefully (we'll keep our fingers and toes crossed) we can get a decent (???) return of 10% or so on that. Given those circumstances and the magic of compounding we should have upwards of $500K by the time we retire. I've read on TMF site but I can't recall exactly where, that you should allow a savings nest egg of 170K per 10K a year you wish to have during retirement. Our goal is to live off of 30K and we're, therefore, hoping to save around $500-510K. After taxes, job expenses and daycare our current 95K yearly income is a lot closer to half that amount; we feel 30K, albeit in future dollars, shouldn't be too hard for us to get by on.

Does this sound a bit more reasonable???


Personally, I think a $30,000/yr withdrawal from $500,000 in assets (6.00% withdrawal rate) is still a little risky, but everyone has a different risk tolerance. See the following link:

http://www.geocities.com/WallStreet/8257/accum1.html

I actually did some consulting work the first 2 years after I retired in 1994 at age 38 to provide a little "cushion" -- and I was only using a 4% withdrawal rate!

intercst

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Author: bgnap Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 122 of 736550
Subject: Re: Feasibility of Early Retirement Date: 7/7/1999 12:57 AM
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<<I actually did some consulting work the first 2 years after I retired in 1994 at age 38 to provide a little "cushion">>

We've already thought of this possibility. I have a master's degree and have always aspired to teaching at the college level. I plan to pursue part-time teaching at our local community college once I retire from my position at the bureaucratic county government agency where I'm currently employed.

One final comment and then I promise to let this post rest: I still feel we should pay down our mortgage as early as possible if just for the psychological benefit of knowing we won't have to pay for housing once we're retired (except for about 2.5k a year in tax-deductible real estate taxes). The argument that you can divert money available to pay down a mortgage into an investment and beat the interest you're paying on your loan doesn't change the fact that you still have the burden of a monster debt on your back...and, if retired, the lack of a steady paycheck coming in weekly...follow? Further, I consider our home an additional investment and one we can cash in on (sell) if our retirement nest egg gets a little shaky.

Okay, I'm done, that's all she wrote...
Thanks for reading,
BGnAP

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Author: llambe Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 123 of 736550
Subject: Re: Feasibility of Early Retirement Date: 7/7/1999 1:13 PM
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I have a (personal) theory on paying off a house loan early to help retire early. It seems to me a good thing to have paid off your house by retirement time. However, it also occurred to me that you can pay it off just as well the day before you retire as to pay it off little by little until you retire. And if you pay it off in a lump sum, you can invest the money in the meantime and hopefully make enough in interest to retire earlier. Also, if it turns out that you are not going to retire to the area you currently live in, you have the money available to buy in another place without having to sell the house you're in. Of course, the disadvantage of this would be the large tax burden for that year (from cashing in your stock) but if neccessary I think it could be spread over a couple years.

Lael

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Author: galeno Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 124 of 736550
Subject: Re: Feasibility of Early Retirement Date: 7/7/1999 6:08 PM
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After reading the posts, I'll chip in with my two cents. Yes, if you and your husband wind up with more than $500K in 10 years, you'll be able to retire. $500K is a good goal to shoot for. I agree with intercst, 20 times your projected retirement income is too aggressive for my tastes. I use a multiple of 30.

According to my calculations, every $360K will generate $1K per month of retirement income. You would put $60K in MMFs (60 months of living expenses to buffer the market ups and downs) and $300K in stocks. Every January, you sell 4% of your stocks and add this to your MMFs and divide by 60. This is your monthly draw for the year.

Intercst likes to keep 2 years of living expenses in MMFs and then ladders the rest (3,4, or 5 years)in CDs to get a couple of extra percent of interest on his cash. This is a good idea. I may do it. Right now, I just keep it all in MMFs.

As far as the house, like intercst, I owe a lot of my success at being able to retire early to NOT owning a home. Contrary to conventional wisdom, homeownership is a money pit. I realize that a paid off-home offers psychological peace of mind but it will probably retard your dreams of early retirement by 5 or 10 years.




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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 135 of 736550
Subject: Re: Feasibility of Early Retirement Date: 7/11/1999 2:54 PM
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I'll put my 2 cents in on this home issue. Owning a home vs. renting is to me a psychological issue, not a financial one. My bend is towards home ownership & I quite honestly don't even think about the additional costs involved. In fact, I even spend money on my home that maybe I shouldn't --- but I like doing it.

That be said, it is a "hands down" mathematical no-brainer that you should not prepay your mortgage if you are able to --- instead you should invest that theoretical difference in the market (in either before tax or after tax investment devices). The concept is called "postive arbitrage". Let's say your mortgage is $100,000 @ 7.5%. Your after tax cost to borrow that $100k is approx. 5%. Why wouldn't you borrow $100k every day of the week @ an aftertax cost of 5% to invest in long term growth devices --- stocks or whatever.

The real danger (and hopefully less so by the participants in these boards) is not saving the money at all but spending it instead on your fancy of the moment.

I am retired (for the most part) and continue to carry a $500,000 mortgage at 7%. Why on earth would I take $500,000 earning 15% to 20% to pay off a 7% debt?






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Author: methree One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 141 of 736550
Subject: Re: Feasibility of Early Retirement Date: 7/11/1999 8:10 PM
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>I am retired (for the most part) and continue to carry >a $500,000
mortgage at 7%. Why on earth would I take $500,000 >earning 15% to
>20% to pay off a 7% debt?

I could not agree with this more. I pondered this for a while and my wife and I came to the same conclusion. If you need a psychological crutch, then take the money you would have paid the house down with and put it in a Etrade or Ameritrade "house account" stock account and purchase long term buy-n-hold stocks with it. You would be surprise how quickly this will grow. If you want, in 10 years, you can pay off the mortage out of the growth of this account. However it would still be nice to have a write off available.

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Author: wardee Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 395 of 736550
Subject: Re: Feasibility of Early Retirement Date: 8/31/1999 2:42 AM
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By the way, my wife and I make about 90k plus per year. I must be missing something about this early retirement issue cuz I can't imagine retiring that early....either that or I am REALLY missing the boat on this subject. Please, fools...guide me towards the promised land of early retirement.

Does anyone remember Bachman, Turner, Overdrives song where one of the verses goes, " I LOVE TO WORK AT NOTHIN' ALL DAY"???? That's what I want to do.

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Author: messerb One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397 of 736550
Subject: Re: Feasibility of Early Retirement Date: 8/31/1999 8:15 AM
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wardee asks:
I have a 10yr mortgage on my house. I owe $24K on it. I have been making some extra payments this year. Over $600/month comes off the principle at the moment. It will probably be paid off by Y2002. The rate is 7.4%. We have 60k in our trad. IRA, 4k in our new Roth and we are both maxing out our 401k plans.

I could easily pay off the balance by next August. Wouldn't it be better to pay it off ASAP and then have the $750/month to play the market with by next August?


wardee,
You are so close to paying the mortgage off, that your decision really boils down to what makes you more comfortable. You can invest some now (not prepay) or invest more later (prepay and have $750/month next year), just as long as you invest.

Fool on!
messerb


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Author: WilliamLipp Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 398 of 736550
Subject: Re: Feasibility of Early Retirement Date: 8/31/1999 10:08 AM
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wardee Date: 8/31/99 2:42 AM Number: 395
By the way, my wife and I make about 90k plus per year. I must be missing something about this early retirement issue cuz I can't imagine retiring that early....

But what are you living on? If you are living the lifestyle of 60K, it shouldn't be hard to imagine early retirement. If you are living the lifestyle of 95K, it's unimaginable.

Does anyone remember Bachman, Turner, Overdrives song ... " I LOVE TO WORK AT NOTHIN' ALL DAY"????

Not quite all of it.

I get up every mornin
duh duh duh duh duh duh duh
take the 8:15 into the City.

People push and people shove
duh duh duh duh duh duh above
and all the girls are tryin to look pretty.

.....

Takin' care of Business. Every day.
Takin' care of Business. Every Way.


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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 402 of 736550
Subject: Re: Feasibility of Early Retirement Date: 8/31/1999 6:31 PM
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WilliamLipp wrote,

wardee Date: 8/31/99 2:42 AM Number: 395
By the way, my wife and I make about 90k plus per year. I must be missing something about this early retirement issue cuz I can't imagine retiring that early....

But what are you living on? If you are living the lifestyle of 60K, it shouldn't be hard to imagine early retirement. If you are living the lifestyle of 95K, it's unimaginable.


Excellent point William,

I was making 85-90k$ when I retired in 1994 at age 38, but I was living on about 20k$ per year.

You are more likely to increase your chances of retiring early by saving more rather than taking big risks to boost your investment returns.

intercst

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Author: bohr One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 404 of 736550
Subject: Re: Feasibility of Early Retirement Date: 8/31/1999 9:46 PM
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<<By the way, my wife and I make about 90k plus per year. I must be missing something about this early retirement issue cuz I can't imagine retiring that early....either that or I am REALLY missing the boat on this subject. Please, fools...guide me towards the promised land of early retirement. >>

Wardee,

It's all about living below your means and investing the balance.

If you don't like working for the man, then spend less than you make, choose a well-founded investment plan and stick with it. There's really not a whole lot else to it.

I started with a 401k fifteen years ago, graduated to investing my after tax money in the market about two years ago and expect to retire next year at 47. Last year was the first time I ever broke $65k/yr on the old 1040.

At 90k/yr, you will work as long as you choose to. Anything more than 10 years, & you're choosing to! Live on 55k, invest 35k, in 10 years at a measley 20% in the Foolish Four, and you have 1120k, enough to provide you 55k/year & only draw 5% of your nest egg. But it is something you choose...

Personally, I'm looking forward to rising about 0630, getting showered & dressed, and finishing breakfast just in time to park myself on the front porch with a mug of coffee and my feet propped up, so I can wave to all the company men charging forth to meet the rush hour traffic. B^)

Good luck with your plan,

Bohr

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Author: JACKMcFOOL Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 407 of 736550
Subject: Re: Feasibility of Early Retirement Date: 9/1/1999 4:46 PM
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Personally, I'm looking forward to rising about 0630, getting showered & dressed, and finishing breakfast just in time to park myself on the front porch with a mug of coffee and my feet propped up, so I can wave to all the company men charging forth to meet the rush hour traffic. B^)


Bohr, I agree 100%. We both must have jobs that are adequate but unfulfilling. I too look forward to my release from the rat race. I should be able to pull it off in 3 years at age 46. I don't think anyone who visits this site will ever wish they spent more time at work "playing the game". My coffee cup and I will be watching the traffic as well.
Good luck,
Mcfool

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Author: bohr One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 408 of 736550
Subject: Re: Feasibility of Early Retirement Date: 9/1/1999 7:57 PM
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<<We both must have jobs that are adequate but
unfulfilling. I too look forward to my release from the rat race. >>

Yup, I'm guilty. Had a really enjoyable working career up to a few years ago. Then we had a mgmt change... That's what gave me the impetus to start finding another way to make a living. Now the two processes are feeding on each other - job satisfaction is in a death spiral while market knowledge and returns are accellerating (Can you say stage 3 afterburner? Sure you can! Wowee! Yowsa! We're headed for 100%+ gains this year!)

I'm not entirely comfortable with punching out immediately, but it is survivable, and I have a few part time options available if need be. Objectives, strategies & tactics are in place, all I have to do is execute.

Now it's down to two events: either another 18% gain in the nest egg or losing my breakfast when I open my office door, which ever comes first. Hehhehheh, any bets on which?

Keep on it, McFool! Think how good it's going to feel when you put in your notice, the boss asks where you're going & your one word reply is... "Fishin'."

Best regards,

Bohr



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Author: richbird One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 409 of 736550
Subject: Re: Feasibility of Early Retirement Date: 9/2/1999 3:11 PM
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Hi Guys,

I'm new at TMF. An early retirement is something that I dream about and work towards each and every day.
(long sigh)

Some of you sound really commited. Good for you!

richbird

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Author: SuanSuan Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8201 of 736550
Subject: Re: Feasibility of Early Retirement Date: 4/20/2000 9:11 AM
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just keep on working -- why retire so early. she will look for another guy ( with a better body and a longer and harder forarm ) and he will lokk for a younger and bigger breasted woman.
right?
i know it and we have done it all and seen it all before
regards
SuanSuan from Rio

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Author: peteyperson Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56120 of 736550
Subject: Re: Feasibility of Early Retirement Date: 12/1/2001 1:40 PM
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That probably depends on your real return.

In the UK mortgage rates are around 7% and average returns are heavily predicted to drop to an average of 7-8% over the next decade. (Buffett just predicted 7%, a revised prediction up from 6%, for instance).

With inflation averaging around 4% top end, that leaves a 3% safe withdrawal rate pre-capital gains tax on some of the withdrawal.

Therefore from my own calculation (in the UK we cannot treat mortgage interest as a tax deduction) I don't think there's much in it financially.

Thoughts on my math & circumstance? (I'm expecting to invest in a low cost index fund rather than risk major individual stock investments)

Cheers,
Petey



I am retired (for the most part) and continue to carry a $500,000 mortgage at 7%. Why on earth would I take $500,000 earning 15% to 20% to pay off a 7% debt?


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Author: peteyperson Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56121 of 736550
Subject: Re: Feasibility of Early Retirement Date: 12/1/2001 1:57 PM
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Hi bgnap,

A few of my own thoughts on your post. I'm not sure how far you have got in your thinking or reading on this subject so I'll cover a few of the basics as I see them.

Firstly, the research indicates that in the US you have averaged returns of 10-11% per annum. Over some periods the markets have behaved quite poorly when a recession or a crash hits and shares have lost large sums in a short time. To allow for this, it has been discovered that a 4% withdrawal could be made from a portfolio and even in a series of bad years your portfolio would survive for 40+ years. This is based on part history and clearly the future market behaviour may be different, but it seems the best indicator and you have to base your decisions on something!

Many people including Warren Buffett, the most successful investor America has created recently predicts as many others have that the great returns won't continue and that we're now due a 10-20 year period where returns will be between 7-8% annually. This in theory may drop the safe withdrawal rate down to 3%.

The decision on what percentage you want to take is yours, but the higher the annual withdrawal the increase likelihood that you'll run out of money before the end of your life. However the lower the percentage you insist on taking, the more time you will have to spend saving for retirement and perhaps you may not live long enough to enjoy it! It's all a balancing act crossed with a big gamble if you ask me!

The math you have heard if a little wrong from how I understand it.

If you are working to a 4% safe withdrawal rate which I beleive most people that use this board do, then you need 25 times your expected retirement spending. (Retirement spending is likely to be different in some respects. Perhaps you will no longer have a mortgage, perhaps you will go out less for expensive meals but wish to travel more frequently and for increased periods of time, for instance).

So if you plan to spend $20,000 then you will need 25x that = $500,000
However you should bare in mind that you will be taxed on your withdrawals (TheBadger is a good one to ask on this board about US taxation) and so you won't actually get to spend the $20k. So in effect you have to have more than you need, perhaps 25k for instance, to allow for the losses due to tax. So the 25x / 4% rule is pre-tax.

Early retirement is really decided on how much you can save both in sum and percentage of salary, how low you are willing to go on retirement lifestyle/budget and returns on your investment up to retirement. The question comes down to how fast you want to reach retirement and at what level of spending/lifestyle. As you get nearer it's likely to become very clear to you what is more important and I think you'll likely trade a year here and a year there of less work for a lower income. The question of whether to own two cars instead of one will make a difference, how often you plan to travel etc. These sorts of calculations made a huge difference to what is possible and what isn't possible. You can chase after every luxury calling it a need all the while, when you could have been retired already. It comes down to personal choice/s in the end.

Hope that helps a little.

Petey



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Author: mhtyler Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56126 of 736550
Subject: Re: Feasibility of Early Retirement Date: 12/1/2001 3:32 PM
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"In the UK mortgage rates are around 7% and average returns are heavily predicted to drop to an average of 7-8% over the next decade. (Buffett just predicted 7%, a revised prediction up from 6%, for instance)."

Let me just say that 7% growth would be quite welcome over the 25% drop I've experienced in the last year.

Give me 7 per cent, Please!

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Author: peteyperson Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56130 of 736550
Subject: Re: Feasibility of Early Retirement Date: 12/1/2001 5:28 PM
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;)

Petey


Let me just say that 7% growth would be quite welcome over the 25% drop I've experienced in the last year.

Give me 7 per cent, Please!


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