Comments on: Is retiring by age forty this simple?

By: Jimmy

Jimmy — Mon, 12 Sep 2011 15:35:57 +0000

Good, informative article.

For me, recently self-employed 29 year old, 2 kids, medium size mortgage, retiring at 40 IS a benchmark, not a definite.

Being self-employed allows you to be tax-efficient, and to therefore invest more money into your goal. Being ‘frugal’ has not really been a part of my plan, as living well in the present stops me from dipping into my savings pot.

Personally, I’m putting 50% of my take-home pay (£25k) into my savings and investments, and I hope that should give me a pot of around £450k in 10 years.

This, in theory, would be enough for me to retire on if I can continue to squeeze 10% ROI, through growth and dividends.

However, to me, retiring at 40 is more about relieving the pressure of work. If I achieved my goal, would I retire? Probably not! But it would give myself and the family greater flexibility to do what we want to do, and not to be chained to a desk for a further 25 years!

By: retired at 54

retired at 54 — Sun, 26 Dec 2010 20:36:18 +0000

Retiring at 38, 40, 45 or maybe 50 is so unattainable for most if not all people unless you have a much larger than the average 50k per year income. Retiring early and living in a modest apartment is a stranglehold on your finances….rent forever…what do you do for health care????Do you even have any????? Any policy that is reasonably priced has a 10k annual deductible. I don’t care what paltry interest rate you earn (less than 1% for the past couple of years) your interest won’t even cover health care premiums…also, you’ve got to heat your place, maybe take a shower once a week (if you can afford it), oh and maybe watch TV or turn on a light once in a while. Anyone that has retired or SAY they have retired and have worked in a regular 9-5 job is a liar. If I had to lead a lifestyle where I was afraid to walk out of 1 bedroom apt because of high crime, and had to drive a 20 year old car (just the maintenance with gas and insurance will eat up your interest earnings), I would rather work an additional 10 years. If you live like a low life bum just to quit working at 40 — take me off the list…..Again — health insurance, utilities, car and life insurances — don’t fall for these lies. They are just trying to make you jealous.They say they paid their homes off early — fine, but they used money up they were supposed to be saving … it doesn’t make sense…like they are smarter than we are …. NO WAY CAN IT BE DONE…

By: Doug

Doug — Sun, 03 Oct 2010 00:39:16 +0000

I would say retire before 40 isn’t simple but the steps are simple. Cut expenses, maximize income, and save like crazy but on paper that works just trying doing it.

By: amanohyo

amanohyo — Tue, 10 Nov 2009 01:35:44 +0000

I agree pat, it’s not that difficult if both people work and are committed to a frugal lifestyle by their 20′s. It’s also crucial not to have a boatload of kids (and not to spoil the ones you do have) and to maintain your health to cut down on future medical bills as much as you can.

My wife and I save about 60% of our combined salary; we’re both 32 and on track to retire at 41, barring any catastrophes. It’s shocking how much money the average American wastes on food, furniture, and entertainment.

I understand that saving this much is impossible for many because of high housing costs though. We live in the cheapest apartment we could find, and it isn’t always easy, but we’re willing to sacrifice a little comfort now for thirty extra years of freedom.

By: pat

pat — Tue, 26 Feb 2008 20:01:33 +0000

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

chusubaxter — Fri, 07 Sep 2007 08:09:23 +0000

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

J at IHB and HFF — Sat, 23 Jun 2007 14:51:32 +0000

My Jun. 7 post questioned the 12% estimate too.

By: Lord

Lord — Mon, 18 Jun 2007 23:46:56 +0000

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

Andy — Sun, 17 Jun 2007 22:43:44 +0000

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

plonkee — Sun, 17 Jun 2007 15:00:00 +0000

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.