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Hi, 30 yr old loving the idea of early retirement
Old 07-11-2012, 09:39 PM   #1
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Hi, 30 yr old loving the idea of early retirement

Hey guys, I'm so glad I came across this forum. I'm 30 years old (almost 31) and I haven't done as much as I need to towards retirement. I have a balance of about $37,000 in my 401k. Aside from a small $1,000 emergency fund in a savings account, my 401k is my only savings. Currently I'm contributing 5% and my company matches that 5% for a total of about $300 every two weeks. In July of 2013 I will have been here for 5 years and my contribution and match goes up to 6% for a total of about $400 every two weeks.

I'm curious... what is considered early retirement? If my kids move out when they're 18, I'll only be 45 years old. I'd LOVE to retire by 50 and enjoy life because I'm working 6 days per week (60-70) hours and there doesn't seem to be an end in sight to that. All of the long hours now will be worth it if I can retire comfortably at an early age.

Again, I'm glad to be here and look forward to learning a lot on the forum.
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Old 07-12-2012, 09:05 PM   #2
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Welcome.

I think early is in the eye of the beholder. The earliest one can take SS is age 62. Full retirement age (FRA) is between 65 and 67 depending on when you were born. While different people have different views on it my view is 55 and younger is early, though I retired at 56 and many people view me as retiring early.

IMO the secrets to getting there are regularly saving and investing in low cost index funds, living below your means (LBYM), setting an AA that you are comfortable with and sticking to it and rebalancing as needed.

Best of luck.
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Old 07-12-2012, 10:58 PM   #3
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My definition of early is 50-55. I'd consider forties to be very early.
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Old 07-13-2012, 01:35 AM   #4
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Welcome to the forum.
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Old 07-13-2012, 07:16 AM   #5
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One other thought. If you plan to retire earlier than 59 1/2 you should plan on having significant taxable account assets in addition to your tax deferred accounts (401k) since one generally cannot take penalty free withdrawals from tax-deferred accounts until you are 59 1/2 (some exceptions).
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Old 07-13-2012, 08:05 AM   #6
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Welcome.

Early retirement is nice. Being part of raising your kids is also nice. Maybe you're able to do both, but it seems like it'd be tough on 60-70 hour work weeks. You'll never get those years with your kids back, while there's not that much you can do at 50 or 55 that you couldn't do at 60 or 65. Making more money isn't the only way to save for retirement. Spending less also works. I may be off base with limited information, but I'm just trying to offer some perspective.
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Old 07-13-2012, 08:37 AM   #7
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Making more money isn't the only way to save for retirement. Spending less also works.
I agree. Keeping your expenses low is at least as important as your income. By the OP's post I estimate he makes ~$78K/yr. He only saves 5% of that. Unless he bought a McMansion and a luxury car he should be saving much more than that. If he did buy those things then he's SOL on retiring at 50. At the very minimum he should be maxing a Roth IRA. After that, if the funds in is 401k are good, he should up the % to at least 10. Otherwise start a taxable account. Also, need to increase the E-fund to at least 6 months expenses. With kids, you may want to consider a full year of cash savings for emergencies.
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Old 07-13-2012, 08:48 AM   #8
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Originally Posted by pb4uski View Post
One other thought. If you plan to retire earlier than 59 1/2 you should plan on having significant taxable account assets in addition to your tax deferred accounts (401k) since one generally cannot take penalty free withdrawals from tax-deferred accounts until you are 59 1/2 (some exceptions).
Agreed. My ER plan included a larger amount in my taxable accounts than in my TIRA (a Rollover IRA from my old 401(k)). I consider the TIRA, along with SS and my frozen company pension (do you have a pension?) to be my "reinforcements" available to me when I turn 59.5. Getting to 59.5 is the bigger challenge which is why my taxable accounts have about twice what is in the TIRA. I have been ERed since 2008.
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Old 07-13-2012, 09:47 AM   #9
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welcome, from an (almost) other 30 year old!

As Runningbum said, 60-70 hrs/wk will wear you down. and you'll never get your time back with the kiddos. It's all about balancing priorities....

Good luck, and I look forward to hearing some updates!
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Old 07-14-2012, 01:25 AM   #10
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I'm going to reply to some of these posts when I get to a computer and can type easier… But in the meantime what is a good safe number to use as an annual interest rate in retirement calculators?
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Old 07-14-2012, 06:44 AM   #11
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I threw 50 out there without giving it much thought. 50 would be great, but I'm looking more like 60 I believe.

Quote:
Early retirement is nice. Being part of raising your kids is also nice. Maybe you're able to do both, but it seems like it'd be tough on 60-70 hour work weeks. You'll never get those years with your kids back, while there's not that much you can do at 50 or 55 that you couldn't do at 60 or 65. Making more money isn't the only way to save for retirement. Spending less also works. I may be off base with limited information, but I'm just trying to offer some perspective.
You are correct... it is hard sometimes. Luckily right now I work nights and they are too young to be in school yet. I see them for about 4 hrs on the days I work and we usually all do something together on the day I'm off. In a couple of years when they get to school I'm going to have to figure something out b/c they won't be there from the time I wake up until the time I go to work. I'd only see them 1 day per week.
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Old 07-16-2012, 02:46 PM   #12
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Hello Everyone, I've just joined the group - 47 years young and would like to 'semi-retire' for the rest of my life - have given up on the traditional job and have been trying my hand at a few entrepreneurial pursuits. I agree though that time with kids is important - it's just that when they are growing up that's the key time to be saving for the future. I chose to make less and spend more time at home but now that's caught me short for the future. It's all about balance I think!
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Old 07-16-2012, 02:47 PM   #13
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Oh and I'm not confused about the dryer sheets - I do exactly the same thing, rip them in half
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