On this board, and in my life I talk to quite a few frugal people in their 20s and 30s who have the goal of early retirement. It is easy to make a few simple assumptions and conclude that these people should be retiring in 10 or 20 years. For example if you make the simplistic (but not outrageous) assumption of 5% investment return, and retirement when assets reach 20 times spending, then if you pay 20% of your income in taxes and start saving at age 25, then you can retire at the following times:
% Save Retire at
40 39
35 41
30 45
25 48
20 53
15 59
10 67
Yet, there are very very few people in their 40s and early 50s who are retired. I suspect that in 10 to 20 years very few of my friends will be retired either. What gets in the way? I call on the collective wisdom of the ER community, what should we watch out for? What will keep me from retiring when I hit 45?
% Save Retire at
40 39
35 41
30 45
25 48
20 53
15 59
10 67
Yet, there are very very few people in their 40s and early 50s who are retired. I suspect that in 10 to 20 years very few of my friends will be retired either. What gets in the way? I call on the collective wisdom of the ER community, what should we watch out for? What will keep me from retiring when I hit 45?