Question For You Achievers!

[Tommy_Dolitte]

I applaud all of you on your efforts.  I have two questions:

1)  What were your incomes when in the accumulation phase?

2)  How are some of you able to retire @ 36 and early forties...

I feel like I'm behind...28, $86 K (gross) per year + bonus....

Targeting $25 K investment per year....

 

[gayl]

I started accumulating when I was earning 30k per yr, never earned over 66k per yr, never invested over 18k pr year. Perhaps that's why I did not retire until 52 -- and was only able to do so because of a dbp plan.

 

[SDY888]

Tommy

We are currently at the lower end of the accummulation phase (as measured by age - 34) but been accummulating for about 7 years. Income (excluding bonuses, investment income or other extras) is 125k pa gross, with a savings and investment figure of around 50k - 55k pa, or just under 50% of net income. Earnings in earlier years were lower, but the savings rates were also lower. I figure that with a continuation of 50% savings and investment rate, we can achieve a financially independent status in another 8 to 10 years or so. This will probably not lead to full early retirement, but to at least a devotion of more time to outside interests, travel and leisure.

 

[bow-tie]

Tommy,

We are hoping to get over and stay over the six figure gross income level to help our ER efforts. We are currently saving approx. 40%+ of gross. It would be more except for the damn taxes , and being D.I.N.K.s

I think the % of gross a person/couple saves is the most important thing to concentrate on. The greater the %, the less you are living on and the less you will need to live on in the future.

 

[KB]

I'm earning the most right now, and it's about 75k a year. I will ER in about 18 months, at 53. I bought houses (one at a time), paid extra on them and kept out of any other types of debt and have a house worth 450k for which I paid cash. Once I sell the house, I will be able to ER. Other wise, I'd have to wait until some later date.

I've always invested in 401K, starting at 2% when I had 2 kids in daycare, finally maxing out a few years ago

Kind of the plodding along method for me. I've been a 1 income family for 17 years, so anyone can do it.

 

[bow-tie]

KB,  

You are to be commended for your effort.  Congrats for a job well done.

Just goes to show you every little bit helps, and you have to start somewhere.

 

[KB]

Thanks Bow-tie,
It's been tough but my kids are getting closer to growing up and leaving the nest (17 and eighteen).  I'm looking forward to it, I'm worn out.

 

[Hyperborea]

I think the % of gross a person/couple saves is the most important thing to concentrate on.  The greater the %, the less you are living on and the less you will need to live on in the future.

That is definitely a better measure than just raw dollars saved but I think an even better measure is (dollars saved) / (expected retirement "income"). Right now I save a bit more than 40% of my income which isn't bad. However, that amount is 150% of one year's expected retirement "income". The big drop in expenses comes about because I currently live in a high cost area that I will leave when I retire - even the most basic condo here costs multiples of the average US home.

I'm in my late 30's and plan to retire in 7 years in my mid-40's. I have no pension plan and very few to no companies in my field offer them. I think if you want to retire very early (i.e. pre-50's) you either need a good pension + some savings or you need to make more (probably much more) than the average wage/salary. If you want just early retirement (pre-60's) then I think you can do it with only average wage/salary and slow but steady saving/investment.

 

[JonnyM]

Never thought about ER until early 40's

Still accumulating, trying to follow in Gayl's (above) footsteps, in that I've stayed steady in a public sector job for over 20 years. At age 43 came across the retirement rule that stated age 50 was the minimum and that day it became my goal. I was making about 40K at the time, somewhat more now with two promotions and some colas. I honestly was in no position to accumulate outside of the job's DBP before that time due to life circumstance. I've managed to 457 away about 60K in the last 6 years, and we're talking serious DCA over THAT period 8)

I've settled on working a bit less than 2 more years to age 51 to max out current position salary as DBP is based on the highest 12 months.

So I guess I'm in the Turtle category, never made a ton of money in a given year, but stayed working for the same employer with a great pension plan for the duration. This method doesn't support VERY early retirement, but I'll have to be content with 51. Oh, and DW worked more or less the same job, same years, same pay, same deal. Doubles up nicely. 8) 8) 8)

 

[BUM]

Tommy,

I admit it . My wife is the queen of accumulation. A pack rat but also with money. Frugality (and happiness) is not a destination but a way of travelling. After 30 years of wedded bliss we got it because she socked it away.

BUM

 

[Tommy_Dolitte]

KB....one word.....WOW!

You guys are great...thanks for taking the time to respond!

TD

 

[Cut-Throat]

I applaud all of you on your efforts.  I have two questions:

1)  What were your incomes when in the accumulation phase?

2)  How are some of you able to retire @ 36 and early forties...

I feel like I'm behind...28, $86 K (gross) per year + bonus....

Targeting $25 K investment per year....

Well, if you are behind: I was really behind! - I did not start thinking about ER until I was 29. - I was in debt up to my eyeballs! - First Step was pay off the Debt - I did by age 30, and started saving like mad. Quit Work at 50, 3 years ago. So I don't think you are behind at all.

I never made a huge salary. mostly between 75K-110k my last 10 years of work. Just kept saving and investing and not keeping up with the Joneses. I did not own my own business, but just a chump employee.

If you are making 86K a year at 28, you are well ahead of 95% of folks. Those that can retire before age 50 are truly the exception!

 

[Hyperborea]

I never made a huge salary. mostly between 75K-110k my last 10 years of work.

$110K / year 3 years ago is over twice what the average US family earns so I'm not sure that you can make that claim. Median household income in 2001 was ~$51K.

I wonder if anybody has retired "early" with that or lower income and no pension plan? Without extremes like living in a tent and dumpster diving for food. Note that the median has gone up with inflation so even if you had $51K income 20 years ago that would be twice the then median household income.

 

[farmerEd]

I retired 3 years ago at 37...I had a few great years in my consulting business, but most of them were merely good, before I decided that I had enough....

Funny enough, back in 1991/1992 when I first decided that there was *no way* I was going to work as a corporate drone for the rest of my life(I was driving 2+ hours each way to work and back), I created a little XL spreadsheet called er.xls...to this day I still have it and update it several times per week; I keep track of my investments as well as spending/income goals etc...along with a lot of other important info...now I even keep a copy of it on my palm...and its the very same file I created about 12 years ago(with lots of changes).

Now, using a spreadsheet certainly didn't help me ER, but having goals did; very specific goals with dates attached to them...every year I could see how well I was doing etc.

And while I did enjoy a few very good years in my business (contract programming), the reason I could ER when I did is because I always lived WELL beneath my means...never used debt except for mortgages, and got out of them as quickly as I could(my wife says I was crazed everytime we had one until it was paid off).

Oh, and lest anyone think I am sitting on a stash of millions and millions of bucks, I am not...merely sitting on a stash big enough to let me draw around 4% indefinitely, and live simply/inexpensivley...and if I feel like buying something thats not "in the budget" I may pick up a few hours here and there to get some cash(or sell something)...my household now operates as an extremely efficient business...where all the waste has been cut out, no interest payments and any topline growth falls right down to the bottom line...especially since I no longer need to pay any of those pesky income taxes (except property)...had I not had to pay all the taxes I paid in my previous life, not only could I have ER'ed even a little earlier, I could have a nice million+ house in the carribean too....

 

[Cut-Throat]

$110K / year 3 years ago is over twice what the average US family earns so I'm not sure that you can make that claim.  Median household income in 2001 was ~$51K.

I wonder if anybody has retired "early" with that or lower income and no pension plan?  Without extremes like living in a tent and dumpster diving for food.  Note that the median has gone up with inflation so even if you had $51K income 20 years ago that would be twice the then median household income.

I never said that my salary was not above average, I just said it was not huge! - Like upper Six Figures for instance. :

 

[Tommy_Dolitte]

Congrats FarmerEd....

You drive home a good point.  One popular thought is that to retire you must have lots of money...when in fact, there is a threshold you can hit and comfortably live if you prioritize and get your living expenses in order.

Great post.

TD

8)

 

[farmerEd]

Congrats FarmerEd....

You drive home a good point.  One popular thought is that to retire you must have lots of money...when in fact, there is a threshold you can hit and comfortably live if you prioritize and get your living expenses in order.

Great post.

TD

8)

People are funny about money...I was talking with my sister-in-law and her husband the other weekend...I was telling them about this 8 year old girl we know who will be inherting about $2million bucks from a rich great-aunt whom she never knew(some people have all the luck).

My comment was that this girl was basically "all set"... to which my sister-in-law poo-poo'ed that thought and said that "$2 million really isn't all that much any more"...true enough, but then again, $2M can kick off 80-100K per year forever easily I said...and she also follows up with, but yea, who can live on 80K per year anymore?

I gave up ...these people (my brother-in-law and sister-in-law) are good enough people, my guess based on what they do for work, is that combined they pull in about 85K, BUT...they have a $1600/month mortgage, $700/month property taxes, car payments on 2 new cars, 3 cell phones in the family, cable tv, new addition on the house, new appliances etc etc etc....no wonder they don't think anyone can get by on $80K...they couldn't.

I on the other hand would be perfectly happy to inherit $2Million bucks and/or and permanent income stream of $80K if anyone has no immediately family they would like to leave it to...

 

[Cut-Throat]

Well, Farmer_ed did you tell your sister-lin-law that you could live on 80K per year? - She must know that you're retired - correct?

 

[farmerEd]

Well, Farmer_ed did you tell your sister-lin-law that you could live on 80K per year? - She must know that you're retired - correct?

I did point out that probably 95% of the people on the earth would be doing really, really well if they had that much coming in every year...but the point was lost.

And no, she doesn't know that I am retired...I rarely see them anyway...almost nobody knows. I prefer it that way.

 

[Tommy_Dolitte]

It's sad....if people took the time to THINK, they'd realize that they are participating in a scheme that was developed over 150 years ago....

Marketing and credit are two of the world's biggest evils....

Everything is one big commercial...play on people's esteem, emotions, self-worth, vindication, or sense of achievement...too funny---even academia is corrupt now...

TD

 

[MJ]

Call me selfish,
but
maybe there is a silver lining in the thinking of many people that they don't have enough money to retire early
because
they will continue to work and fill the diminishing coffers of SSA, Medicare and the US treasury.
I would love to be able to get my full SS and Medicare benefits in 5+ years, and for the additional 30+ years.

Cheers

MJ

 

[John Galt]

Hello MJ. I agree with your theory. Surely the millions
who "must" continue to work (they think) will help those of us who have opted out. I always tell working
people that it's a comfort to me to see them working and keeping the economy moving forward, as I am not
contributing a damn thing. This is not literally true of
course as I still invest/consume etc. Still I kind of enjoy
gigging the working stiffs.

John Galt

 

[brewer12345]

I gave up ...these people (my brother-in-law and sister-in-law) are good enough people, my guess based on what they do for work, is that combined they pull in about 85K, BUT...they have a $1600/month mortgage, $700/month property taxes, car payments on 2 new cars, 3 cell phones in the family, cable tv, new addition on the house, new appliances etc etc etc....no wonder they don't think anyone can get by on $80K...they couldn't.

I on the other hand would be perfectly happy to inherit $2Million bucks and/or and permanent income stream of $80K if anyone has no immediately family they would like to leave it to...

I'd be thrilled to inherit $2 million, too, provided it wasn't contingent on a close family member croaking.

However, I will dispute somewhat your sentiment that anyone making $85k or so should have more than enough to play with. If one inherits a portfolio that can throuw off that much, it is pretty easy to modify your expense base and tax bill radically if you need to. In the case of those still stuck in the salt mines, that is not necessarily the case. I am n the 6 figure category (barely), and due to the high cost of living where I am things are a bit tight from time to time. Admittedly, this is partially because I live in an environment of intentional scarcity due to heavy investment contributions and rapid debt amortization, but even if I were not devoting significant resources to net worth building I would have a much higher cost of living just staying close to my chosen labor market than if I had the freedom to move to a lower cost area.

 

[JOhn Galt]

My taxable income is "below the radar"
and yet I can do just about whatever I want
without suffering from "want". Of course, I am pretty
friggin' old and have a working wife. Makes a difference. Otherwise, I advocate
the "NIKE" approach to ER. "Just do it!"

John Galt

 

[unclemick]

Oldest nephew/wife are in San Diego by now. Navy officer/civilian contractor(she's out) with presumably lifestyle assumptions. Haven't found a house yet and couldn't sell the 32' sailboat and trucked it down from Whidbey.

Soooo - say's I - live on the boat since you gotta put it in a marina anyway. Answer - shocked silence.

Heh, heh - this is my 'think out of the box' week. Appolgies to Billy.