Comments on: Is retiring by age forty this simple? http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/ Personal finance, commentary, and spending less the easy way Sat, 07 Nov 2009 00:26:19 -0400 http://wordpress.org/?v=2.8.5 hourly 1 By: pat http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/comment-page-1/#comment-126173 pat Tue, 26 Feb 2008 20:01:33 +0000 http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/#comment-126173 Retiring at age 40 should be pretty easy. My wife and I (both age 25) make around $115 combined. We have been saving around $50/year. That is the most we will probably ever be able to save. Our income will go up, but we will have kids and new expenses. But I really think we will always be able to save $50/year. In 15 years we will have around 2.5mil. Even in a joke account we will make around 150/year just on interest. 150/year is more than most couples ever see. Retiring at age 40 should be pretty easy. My wife and I (both age 25) make around $115 combined. We have been saving around $50/year. That is the most we will probably ever be able to save. Our income will go up, but we will have kids and new expenses. But I really think we will always be able to save $50/year. In 15 years we will have around 2.5mil. Even in a joke account we will make around 150/year just on interest. 150/year is more than most couples ever see.

]]> By: chusubaxter http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/comment-page-1/#comment-90508 chusubaxter Fri, 07 Sep 2007 08:09:23 +0000 http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/#comment-90508 i like your approach but i m always looking to see a better and constructive approach not only pointing out the bad things. i would love to see the real method of retiring at age 50 if not 40 :) i like your approach but i m always looking to see a better and constructive approach not only pointing out the bad things. i would love to see the real method of retiring at age 50 if not 40 :)

]]> By: J at IHB and HFF http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/comment-page-1/#comment-66547 J at IHB and HFF Sat, 23 Jun 2007 14:51:32 +0000 http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/#comment-66547 My Jun. 7 post questioned the 12% estimate too. My Jun. 7 post questioned the 12% estimate too.

]]> By: Lord http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/comment-page-1/#comment-62691 Lord Mon, 18 Jun 2007 23:46:56 +0000 http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/#comment-62691 Yes, just because equites average 10% doesn't mean you can live off that. It doesn't return 10% every year and is down many of them. Your capital would also be devoured by inflation over the long term. That is the reason for the 4% safe withdrawal rate rule and the reason the article is way too optimistic as written. Yes, just because equites average 10% doesn’t mean you can live off that. It doesn’t return 10% every year and is down many of them. Your capital would also be devoured by inflation over the long term. That is the reason for the 4% safe withdrawal rate rule and the reason the article is way too optimistic as written.

]]> By: Andy http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/comment-page-1/#comment-61749 Andy Sun, 17 Jun 2007 22:43:44 +0000 http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/#comment-61749 Did I miss something? The article in question only covered the accumulation phase . . . that is the easy part. A retiree at 40 faces 50 years of living off that portfolio. Fifty years of unexpected expenses, of uncertain inflation levels, of booms and busts . . . what a joke. Try managing a portfolio for both growth and current income and you'll be out of that S&P500 index fund in a heartbeat. Did I miss something? The article in question only covered the accumulation phase . . . that is the easy part. A retiree at 40 faces 50 years of living off that portfolio. Fifty years of unexpected expenses, of uncertain inflation levels, of booms and busts . . . what a joke. Try managing a portfolio for both growth and current income and you’ll be out of that S&P500 index fund in a heartbeat.

]]> By: plonkee http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/comment-page-1/#comment-61360 plonkee Sun, 17 Jun 2007 15:00:00 +0000 http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/#comment-61360 I knew this was why it was too difficult for me to retire at 40 (or even in 20 years time). However, it shows more that its pretty close to possible if you live well beyond your means and invest well - you only need a tiny portion of luck rather than winning the lottery type levels. I knew this was why it was too difficult for me to retire at 40 (or even in 20 years time). However, it shows more that its pretty close to possible if you live well beyond your means and invest well – you only need a tiny portion of luck rather than winning the lottery type levels.

]]> By: fivecentnickel.com http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/comment-page-1/#comment-60461 fivecentnickel.com Sat, 16 Jun 2007 21:25:52 +0000 http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/#comment-60461 <strong>Weekly Roundup - 06/15/07...</strong> Well, here we are… In a few days we’ll be taking off for vacation, so we’ve been madly rushing around trying to tie up loose ends in advance of our departure. If you’re interested in contributing a guest post, please let me know... Weekly Roundup – 06/15/07…

Well, here we are… In a few days we’ll be taking off for vacation, so we’ve been madly rushing around trying to tie up loose ends in advance of our departure. If you’re interested in contributing a guest post, please let me know…

]]> By: Lord http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/comment-page-1/#comment-60267 Lord Sat, 16 Jun 2007 18:08:35 +0000 http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/#comment-60267 There is one way he could come close. If he will also pay off a home in that time, then his real saving rate is more like 20%+25% or 45% and this would put him most of the way there. I retired at 43 myself and could have done so earlier if that had been my intent. The alternative of finding something you can do and enjoy is not bad but can be difficult. There is one way he could come close. If he will also pay off a home in that time, then his real saving rate is more like 20%+25% or 45% and this would put him most of the way there. I retired at 43 myself and could have done so earlier if that had been my intent. The alternative of finding something you can do and enjoy is not bad but can be difficult.

]]> By: Patrick http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/comment-page-1/#comment-59326 Patrick Fri, 15 Jun 2007 22:46:12 +0000 http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/#comment-59326 Very well thought out and researched. Is it possible to retire at 40? Of course, it is. But, more than likely, life will get in the way. Situations change, jobs come and go, stocks go up and down, the one person the paycheck had to cover turns into 2 or 3 or more people. I think the important part of Trent's article is to diligently save a high percentage of your pay, and to live frugally. I think your message is also clear: there are too many unknown variable to plan for a retirement beginning in 20 years, and that will last 40+ years. Your advice about "knowing what I know now" is also very good. :) Very well thought out and researched. Is it possible to retire at 40? Of course, it is. But, more than likely, life will get in the way. Situations change, jobs come and go, stocks go up and down, the one person the paycheck had to cover turns into 2 or 3 or more people.

I think the important part of Trent’s article is to diligently save a high percentage of your pay, and to live frugally.

I think your message is also clear: there are too many unknown variable to plan for a retirement beginning in 20 years, and that will last 40+ years.

Your advice about “knowing what I know now” is also very good. :)

]]> By: Lord http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/comment-page-1/#comment-59028 Lord Fri, 15 Jun 2007 16:28:05 +0000 http://www.mightybargainhunter.com/2007/06/15/is-retiring-by-age-forty-this-simple/#comment-59028 More realistic estimates using a 4% safe withdrawal rate, adjusting withdrawals for inflation, 100% income replacement level, offering the same standard of living in retirement while saving for it, a more realistic 7% real return, saving 20% per year would require 31 years of work so he had better start when he was 10! Or wait until 50. Even a 10% real return would require 25 years. Now if he started at age 20 and saved 38% of income with a 7% real return or 30% of income with a 10% real return, or started at 25 and saved 50% of income with a 7% real return or 44% of income with a 10% real return, he could do it. More realistic estimates using a 4% safe withdrawal rate, adjusting withdrawals for inflation, 100% income replacement level, offering the same standard of living in retirement while saving for it, a more realistic 7% real return, saving 20% per year would require 31 years of work so he had better start when he was 10! Or wait until 50. Even a 10% real return would require 25 years.

Now if he started at age 20 and saved 38% of income with a 7% real return or 30% of income with a 10% real return, or started at 25 and saved 50% of income with a 7% real return or 44% of income with a 10% real return, he could do it.

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