xhail asks,We often here of retrirement goals of 1mil, 2mil, 5,even 10, but what about less than $500,00 for those who live below their means and don't need much?That is $12,500-$25,000 personal expenses per year.Anyone with lower goals 0f $250 - 500g? It certainly seems more attainble woth the possibility of attaining more.What if you didn't care about larger returns in the stock market and treated this amount as cash reserves in safer but lower returns like cd's at say a low average of 5% interest and you planned on withdrawing 2 1/2,3, 4 or even 5% each year?Is this safer or am I missing something? How would inflation affect this pictureWhat about increasing health costs and other costs?.What about the the time factor and years of living?Would you be better off still investing in stocks with higher risks?Just trying to raise some questions and get a thread started on those trying to retire or at least break free on a whole lot less with the possibility of doing so a whole lot sooner. There's certainly no problem with retiring on $500,000 if you can live on 4% or $20,000 per year.I had about that amount when I retired in 1994. I kept records of my spending for the previous 3 years and found it ranged from $18,000 to $20,000 annually. Still, even though I was well within the "safe" withdrawal rate, I did about 250 hours per year of consulting work the first 2 years after I retired. I didn't stop until my retirement portfolio had grown to well over $1 million in 1996.This illustrates an important point. The only reason my portfolio enjoyed substantial growth is that it contained mostly stock. I'd be doing a lot more consulting work today if my portfolio contained mostly Treasury notes and CDs. I still think it's sound advice to maintain 3 to 7 years worth in living expenses in Treasury notes or CDs, but I wouldn't let my allocation to fixed income securities get any higher or lower.Health insurance costs will undoubtably continue to outpace the CPI. Some folks like Paul Terhorst (author of Cashing in on the American Dream: Retire at 35) self-insure for medical costs. That's more risk than I'm willing to assume. For elective surgery you might be able to go overseas and get the work done cheaply, but what about emergency care? If you have a heart attack, you want to seek treatment locally, no matter what the cost.intercst
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