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Retire at 40?
Old 06-15-2007, 08:18 AM   #1
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Retire at 40?

Retire at 40: Here's how - MSN Money

I guess the difference in what folks post here is saving 40%+ rather than just 20...Obviously, most people dont make big dollars at 20 and many not until latter in their 20s because of law school, grad school, etc. with loans.

Also, their investment returns sound a little aggessive for just the sp500....and that is so yesterday anyway...
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Old 06-15-2007, 11:12 AM   #2
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I agree… this analysis was definitely simplistic. I guess you have to consider the broader audience - MSN readers to whom 20% sounds like a huge sacrifice. The returns are clearly a little optimistic and inflation is glossed over. Looks like the author just wanted to get as close to age 40 as possible… without going above a 20% savings rate.

Maybe this article would help a savings novice to get interested in the concept of ER, but for us "in the know" it's pretty worthless. As for me I'm closer to 60% right now - I WILL make it by 40!
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Old 06-15-2007, 01:25 PM   #3
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It was a decent article but way to simplistic. Obviously there is no guarantee that the S&P500 will return 12% going forward. In fact it could be much higher (doubtful) or as most folks believe it will be a good deal lower. The article makes no mention of diversification, asset classes, etc.. But it did stress saving a percentage of your income and that cannot be emphasized enough. Overall I rated the article 3 stars of 5.
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Old 06-15-2007, 01:27 PM   #4
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NEVER "earned" more than $24K per year in my "working" years which ended twice, once in 1979 (age 38years) and, with short duration sporadic work, again in 2002. Spouse was a stay at home Mom except for 10 years (working at minimum wage levels) just to qualify for SS in case something happened to me early on. We have saved 65% of the Military Pension and SS for past 28 years (Pension), 7 years (SS). Raised 4 kids, all college graduates. Myself and 2 Sons have about 50 years active military service and yes two of us have pensions (actually military retired pay) along with full or very significant medical coverage. So yes you have to have a lot of discipline or a big salary but it can be done, and pensions and SS helps along the way. BTW ALL savings was in CD's at primarily Credit Unions earning a 28 year compounded return of an AVERAGE of about 5.7% (actually some mutual funds for very short periods of time and some 2d trust investments for another very short period of time (none of that now)).
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Old 06-15-2007, 04:18 PM   #5
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Originally Posted by bots2019 View Post
I agree… this analysis was definitely simplistic. I guess you have to consider the broader audience - MSN readers to whom 20% sounds like a huge sacrifice. The returns are clearly a little optimistic and inflation is glossed over. Looks like the author just wanted to get as close to age 40 as possible… without going above a 20% savings rate.

Maybe this article would help a savings novice to get interested in the concept of ER, but for us "in the know" it's pretty worthless. As for me I'm closer to 60% right now - I WILL make it by 40!
Nothing like living in a high cost-of-living area with high state income tax. Total outflow to the government (including SS) is something around 35%.

Nothing like realizing that 4+ months of the year are spent solely on income-based taxes
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Old 06-18-2007, 01:34 PM   #6
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Nothing like realizing that 4+ months of the year are spent solely on income-based taxes
For the average American, 'tax freedom day' falls on April 30th (source: the Tax Foundation).

For the average Canadian, it's June 28th (source: The Fraser Institute). Less than two weeks to go now, hurray!
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Old 06-18-2007, 01:41 PM   #7
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For the average Canadian, it's June 28th (source: The Fraser Institute). Less than two weeks to go now, hurray!


I take it that's one of the downsides to univeral health care? wowee...
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Old 06-18-2007, 08:08 PM   #8
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I take it that's one of the downsides to univeral health care? wowee...
hey now! doncha know its FREE healthcare? just ask Michael Moore!
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Old 06-20-2007, 02:20 PM   #9
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I take it that's one of the downsides to univeral health care? wowee...
Yep, it sure is. Nothing in life is free.

There are pros and cons to living in Canada, or living in the States (or anywhere else for that matter). Since very few people are interested in emmigrating, there isn't much point to worrying about such matters ... and no point to arguing over who has it 'better'.
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Old 06-20-2007, 08:06 PM   #10
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For the average American, 'tax freedom day' falls on April 30th (source: the Tax Foundation).

For the average Canadian, it's June 28th (source: The Fraser Institute). Less than two weeks to go now, hurray!
Other things to keep in mind though...Canadians pay the extra 6 weeks of taxes, but cost of healthcare is included in that. Factor in how many weeks the average american has to work to pay his or her healthcare, on top of the taxes due.

Also keep in mind, that while the "tax freedom" day is 4/30 for the US, in effect it is much, much later because the government is running huge deficits (and has a HUGE national debt), so we aren't yet paying for all that we are spending...but WE WILL one day have to pay up for what we are spending. (

Canada, on the otherhand is closer to a pay-as-you-go, and have run a surplus for the last 10 or so years in a row, and cut their national debt in half as well..

Budget Plan, Annex 2 (Budget 2007)

look honey, that new TV I bought was going to cost $2000, but I put $800 of it on my credit card, so it only cost $1200 - I only had to work one week to pay for it! Joe next door had to pay $2000 for his, and he had to work almost *two* weeks to pay for it!

Seems to me, Canadas house is in much better fiscal order than the USA's(even with that "free" healthcare)....now if it wasn't so damn cold up there
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Old 06-21-2007, 08:10 PM   #11
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Other things to keep in mind though...Canadians pay the extra 6 weeks of taxes, but cost of healthcare is included in that. Factor in how many weeks the average american has to work to pay his or her healthcare, on top of the taxes due.

Also keep in mind, that while the "tax freedom" day is 4/30 for the US, in effect it is much, much later because the government is running huge deficits (and has a HUGE national debt), so we aren't yet paying for all that we are spending...but WE WILL one day have to pay up for what we are spending. (

Canada, on the otherhand is closer to a pay-as-you-go, and have run a surplus for the last 10 or so years in a row, and cut their national debt in half as well..

Budget Plan, Annex 2 (Budget 2007)

look honey, that new TV I bought was going to cost $2000, but I put $800 of it on my credit card, so it only cost $1200 - I only had to work one week to pay for it! Joe next door had to pay $2000 for his, and he had to work almost *two* weeks to pay for it!

Seems to me, Canadas house is in much better fiscal order than the USA's(even with that "free" healthcare)....now if it wasn't so damn cold up there
Not to mention that is only federal tax day in America, then you throw in property tax, sales tax (almost 10% where I live), state income tax, wheel tax, etc etc etc.
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