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I'd like to retire before 60
Old 11-21-2015, 03:37 PM   #1
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I'd like to retire before 60

Hi I'm Erika. I'm 40 and I have been investing in a 401k (matched) since 1997.
The problem I had to reduce my percentage around 2008 due to the economy etc. Also years 2006 - 2007 I was contracting I wasn't contributing during those years.
So I have about 183k between a Roth and 401ks.
The hubby has about 120k saved and he is 6 years younger (34).
How can I retire before age 60? Any other savings suggestions?
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Old 11-21-2015, 03:45 PM   #2
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Welcome Erika.

Whether or not you can retire at 60 depends on what your projected spending will be in retirement and any projected income you expect. I am not sure anyone can give you a meaningful answer without that at a minimum.

As is always the case with retirement saving/planning - the more you save and the less you plan to spend after retiring, the earlier you can retire. It's simple, but not easy.
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Old 11-21-2015, 04:46 PM   #3
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Welcome to the forum!

Unless you have another source of income like pension you're going to need a lot more than you have now. It can be done, depending on your income, what you spend, and how much you can save between now and then. That said, others have done it but it takes diligence and self-discipline.

Here are a few questions that you need to have solid answers to before retiring:

Some Important Questions to Answer Before Asking - Can I Retire?
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Old 11-21-2015, 05:24 PM   #4
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Time is your ally when it comes to saving for retirement, and it's good you're still young. It's also important to make proper decisions with your investment portfolio balancing risks and rewards with costs of maintaining your accounts. We don't have any control over some issues--like inflation--that is a big part of being able to retire.

Suze Orman preaches living below your means, and I agree. If you buy a house and can afford a $250K house, buy a $150K house. Buy 1-2 year old cars (not luxury cars) and drive them til they die. Avoid debt of any kind. Take advantage of all your company will match you on the 401K, and fully fund a Roth IRA on top of that. We try to limit our eating out to once per week, and then it's either Krystal or Captain D's. Take your lunch to work. Financial success can be just a bunch off little saving techniques.
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Old 11-21-2015, 07:21 PM   #5
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As Midpack mentioned, it comes down to saving and spending... hand in hand.

The lightbulb went off when I was around your age - as I stepped up my savings into overdrive, maxed out 401k, extra payments to the mortgage, and money into after tax investments. I found myself learning to live on less since I was diverting so much to savings. Pretty soon I had a much smaller spending budget. So... my nest egg required was smaller since I had gotten used to spending less, and the nest egg was growing much faster since I was saving so much. Win win.


You've got some time on your side... So you can probably do this if you make a plan and execute it. Live the mantra "Live below your means" (lbym) and work your plan.
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Old 11-21-2015, 08:10 PM   #6
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......... Pretty soon I had a much smaller spending budget. So... my nest egg required was smaller......
This is a big deal. You need to save $25 for every $1 you spend per year in retirement. Lot easier to spend a buck less than to save 25.
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Old 11-21-2015, 10:19 PM   #7
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Welcome! You've got a very good start on savings and you're planning while you still have many years ahead, so that's also a good start. I'd recommend carefully tracking your spending for at least a year, every dollar that you spend. Even if you don't want to do a strict budget, you'll learn a lot by seeing where you actually spend your money. That will also help identify areas where you can cut back without impacting your lifestyle significantly.
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Old 11-21-2015, 10:38 PM   #8
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Old 11-22-2015, 07:02 AM   #9
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Welcome, snowbunny! Amp up your savings; max out 401k, IRA; track and decrease spending. Run your numbers through firecalc FIRECalc: A different kind of retirement calculator. There is a lot of great advice to be had on this site.

It takes a lot of work/research/planning, but you can do it. Most of us here took this route and eventually made it.
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Old 11-22-2015, 10:18 AM   #10
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Originally Posted by snowbunny27 View Post
Hi I'm Erika. I'm 40 and I have been investing in a 401k (matched) since 1997.
The problem I had to reduce my percentage around 2008 due to the economy etc. Also years 2006 - 2007 I was contracting I wasn't contributing during those years.
So I have about 183k between a Roth and 401ks.
The hubby has about 120k saved and he is 6 years younger (34).
How can I retire before age 60? Any other savings suggestions?
Welcome! Congratulations--you and your hubby already have a lot more saved than most people ever will --and twenty years to crank it up. So great that you are focused on finances. If you want to share where your $$ is invested within the Roth and 401ks, you might get some helpful comments on them (not me, but there are so e pretty smart people here).
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Old 11-22-2015, 02:20 PM   #11
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You have 20 years and once you've reached 50, there is a catch up contribution. My husband has a lot more in my account because he has contributed to catch up contibutions for more than 10 years, not so much for me.
Does your husband want to retire when you do? If not let him work another 6 years.


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Old 11-22-2015, 03:03 PM   #12
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Welcome to the board.

From my perspective, the answer to your questions is, "it depends" on what you consider enough or adequate by the time you are 60. 1m, 2m 3m, more?

20 years is a long time and a lot of things can happen (both in and out of your control). If you have a matching 401k then I'd say you "first should max it out" if at all possible and invest it as wisely (not emotionally) as you can/allowed within that 401k. Don't touch it before you retire. Matching 401 contributions = free tax deferred money. (Several folks told me the same thing when I was in my mid/late 30's and it was the best financial advice I ever got)

You have more in your ROTH and 401k than I had at your age and my 401k was worth well over a million before I was 60. Max contributions, matching funds, wise investing and compounding can yield amazing results in 20 years. For me wise investing in my 401k would be considered relatively conservative by most here on this board.

Second, enjoy life but always look for other ways to save. You may be surprised what "other" opportunities may be presented to you over 20 years.

I was and as it turns out, I may never need to touch my 401k but it established a great foundation and savings discipline.... YMMV
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