How to retire early

[Silverstone the SecondParticipant]

So, I’ve seen this quite a bit on the forums. Guys talking about retiring early and relaxing, enjoying life. How does one go about doing this? I’m assuming it’s not like planned retirement in your 60’s where you have savings and government aid.

What exactly happens when you retire early? Do you just make a s~~~ load of money and then chill?

I’d imagine that simply being a mgtow means you can retire early. Hell, I might be able to retire at 40 if I keep at it.

Feminism is a movement where opinions are presented as facts and emotions are presented as evidence.

[TuneoutParticipant]

Could never do it,always worked,always will,a week off here and there is enough,any more I go stir crazy!

I don’t know how some do it,how much golf and traveling can you do before it gets old and routine?

Lifes a bitch,but you don't have to marry one!

[HitmanParticipant]

One of my best friends worked civil service from age 21 to 41..
Retired with a full pension.
If his wife wasn’t bipolar and he didn’t have 3 kids (last one was because she stopped the birth control without telling him ) ,
He would have been a millionaire.

[Anonymous 42]

How to retire early

Don’t get married, don’t start a family, and you’re living better than anyone that did, How you live is much more important than how you retire.

Don’t allow a woman to saddle you like a beast.

Wear one of these:

And this is your retirement:

[BeerParticipant 11832]

Well my plan for doing it is to dump massive amounts of money in dividend paying stock, and eventually live off the dividends and never sell shares. Hopefully over time share prices and dividends will increase, and if I have extra I’ll reinvest it, so I’ll never lose buying power. I also plan on keeping about a years living expenses out of the market so if the market has a bad year I’m not forced to make any moves I don’t want to…I can afford to just wait it out.

Basically if I get a million dollars in the market paying an average dividend of 4%…I’m getting paid 40k a year. If capital gains are your only source of income for 2016, they are tax free up to 37,650 dollars, plus your standard deduction and personal exemption…your tax free almost up to 50k…and going over that amount you’d only get hit for 15%…not bad at all. An extra bonus is you don’t have to pay payroll taxes either…so you don’t pay anything to social security or medicare!

40k a year doesn’t sound like a lot of money, but once retired, I won’t be saving for retirement anymore, which is my biggest yearly budget item, and as I just discussed taxes will be minimal, which is my second biggest yearly budget item. If I go from 100k-120k a year down to 40k but eliminate my two biggest expenses, I’ll actually have more cash to play with each month. 40k a year is roughly 3300 a month…I’m living on about 1200 a month right now. I’m content with my current standard of living right now…if I had more free time and an extra 2k a month to blow, I’d be living quite the life.

Healthcare is really the wild card at this point. If I’m going to be stuck paying 1000 bucks a month with a 5000 dollar deductible for insurance I’ll need a bit more than a million. If I can game my income to qualify for fat Obamacare subsidies more years than not, or if we end up with universal healthcare, a million will be more than sufficient.

Otherwise I’m shooting to be retired in my 30s. I’ve been crushing it in the market for the last year and a half…just got lucky selling stock and buying back cheaper a few times. I’ve also been hitting the savings hard and not spending much. If I keep my savings rate as is and my gains continue at the same pace I could be done working around 36, but more conservatively I’d say 38 is the goal. It really depends how I do in the market and what happens to our healthcare system. Once I am retired though, I plan on spending some years living abroad just seeing the world, enjoying life, and being on my own schedule and not have to punch a clock or have any responsibilities. If I get sick of that or my investments don’t do as well as anticipated and my principal takes a hit, I could always just buy a small place in a cheaper part of the country(I don’t plan on staying in my expensive liberal state forever anyhow) where I live now and just get some joke job somewhere to keep busy and let my nest egg recover a bit if needed.

[FrankOneParticipant 1431]

At this point, I just work for enjoyment really. I stayed away from women in my 20’s. And saved maybe 70-80% of income. When you are in your 20’s, that’s huge — even when not making so much — you know, compounding interest.

I’ve had only 3 cars in my lifetime and own my house. I had a long relationship through my 30’s, but didn’t lose half my stuff, and have no kids. I’m in my mid-40’s. In my field, I can also just cut it back to consulting, 2 or 3 days a week if I want, in fact I’ve done this in the past when I ran my own business the other days. Jumping in and out of full time employment posed no problem for me.

I’d stay away from most debt — ESPECIALLY credit cards, high interest/unsecured debt!

I don’t feel I’m ‘missing’ anything in life by not throwing money away right and left.

Beer has it right, even with only a million dollars invested in stocks, dividends of $30-$40K are quite realistic. Add to that rental income. I’m already at a point where I can live off these dividends without eating away at principal.

Health care will likely be my highest expense when I retire too. Property taxes will be up there too.

It will probably be 10 or 20 years after my retirement that I begin taking money out of the 401K’s.

Always opt to make the MAXIMUM matched contribution to your 401K.

Don’t always INFLATE your lifestyle when your income increases. Do you really ‘need’ that 65″ TV? Or one in each room? Or the sports car that depreciates 30% when you drive it off the lot? I’ve lived the minimalist lifestyle since before it came cool.

Instead of blowing that annual bonus, SAVE and INVEST it!

[HermitParticipant 136]

I’d never retire. I’ll have a savings fund just in case I ever get laid off, but otherwise, I just can’t see myself not working for the rest of my life.

I have some debt and I’ll have it paid off within 5 or so years. My ideal job would be to find a place where I could work from home. Or at least work in my own office away from all the manginas and women.

I need a routine to feel a sense of purpose. In order to do that, I need to either be in college or work full time. I hate feeling like I have nothing to do in the middle of day.

I remember back when I was unemployed. The most I did was apply to jobs, play video games, and jerk off occasionally. That can be fun in short bursts, but doing it long term would be boring as f~~~.

[Prefer Peace to PieceParticipant 10809]

I lost my first fortune to my Sunday School teacher wife. No problem. Things happen.

Ever since, I have lived frugally and saved.

I could have retired a few years ago, but I like people. When the politics get overwhelming I will hang it up and become a beach bum.

I’m not the world’s best investor. Most of my assets are in precious metal to help protect against a dollar crash. I’ll move some funds into miners that pay dividends and will probably get an annuity as well.

It’s easier for a man to retire early so long as he doesn’t have a wife and kids. Good luck

[BeerParticipant 11832]

FrankOne wrote:

It will probably be 10 or 20 years after my retirement that I begin taking money out of the 401K’s.

Just curious…but why would you wait that long? I work with guys now who are working into their late 60s, and soon as they retire they’ll start collecting SS and a pension that combine for probably roughly 80k a year. They also have million+ balances in retirement accounts. They have just put themselves in a position now where if they want to tap any significant amount of that 401k money they are probably going to end up with a higher gross than they had while working and get hammered in taxes.

My plan was to start 72t’ing soon as I retired. My understanding of how the tax code works is they tax all your income at the appropriate income tax brackets first, which is what your 401k withdrawals will count as, then your capital gains are added to that and taxed at the appropriate capital gains brackets. So basically most of my dividends would be at 0% anyhow and I’ll definitely never be making over 415k in capital gains to get out of the 15% bracket.

Numbers obviously would be subject to change as tax brackets change…but just to illustrate my point…if I retired right now and could 72t 10k out of my 401k and not technically have enough income to pay any income taxes, and if that money was backed up with 30k worth of post tax dividends I’d be paying 0% on that as well. Basically a long slow draw down on my 401k and I can pull quite a bit out at a 0% income tax rate, and even if my post tax dividends get too high I’d only be paying 15%. My effective tax rate at that point would still be ridiculously low…that seems like a much better option than holding off and letting the 401k grow til I’m collecting SS, and I also have some pension money from previous employment waiting for me, and finding myself in a position like my some of my coworkers where I’m pulling 401k money out at the same tax bracket I was in while I was working, especially if during early retirement I spent down post tax investments thinking I was winning by continuing to let my 401k grow. One of the major benefits of retirement accounts is to pull money out at a lower tax bracket than what you would have paid had you not put that money in while working…I want to make sure I take advantage of that to its fullest.

[EyeswideopenParticipant 2930]

I follow the same philosophy of Beer. Dividend aristocrats stocks that pay between 4-5% with maximum retirement saving contributions. I have a slightly higher cash savings margin of 36months to cover any downturns.

Student loans were minimal and paid because of scholarships. I don’t believe in credit and pay most things cash.

I am mid 30s and could retire in a few years with the level of money I spend on a monthly basis. I own my house, so my overhead is about $1000/mo. I own a smaller house, which is nice but not a mansion. I grew up poor, so I am not a toys kind of guy.

Fun to me is reading a book from the library for free. Or going fishing or hunting which is minimal cost.

The problem is I was in school for so long before practicing that I am not ready to hang my stethoscope yet. It’s nice to now that you can retire at any point. I get board easily and need a challenge. I don’t think I would make the transition to retirement too well as my age.

Like PreferPeacetoPeace I could easily be a beach bum. I am comfortable in my own skin and don’t need to impress anyone.

- Marriage is described as an institution. You would have to be crazy to be commited to it. -"If you want to live a happy life, tie it to a goal. Not people or things" Albert Einstein

[survivorParticipant 610]

Prefer Peace to Piece wrote:

I lost my first fortune to my Sunday School teacher wife.

How on earth did that happen? Bad leadership in investment, or something? If you don’t want to share I understand.

"Shot through the heart, and you're to blame, You give love a bad name, I play my part and you play your game, You give love a bad name."--Bon Jovi

[MadmanParticipant 772]

Beer knows what he is doing, I did the same thing and I am retired now at age 36. Of course retirement is different for everyone, if you are frugal and have minimal spending then you dont need that much money to retire. If you want fancy cars and stuff then you will need to save a lot more.

[FrankOneParticipant 1431]

Beer wrote:

FrankOne wrote:

It will probably be 10 or 20 years after my retirement that I begin taking money out of the 401K’s.

Just curious…but why would you wait that long?

I actually wasn’t aware of the 72t option until I read your message — until I read about it, I always thought you faced the 10% early withdrawal penalty before 59-1/2 — now I know better. I have about 15% of my savings in 401K’s so I will definitely think about this! I’m 45 now and am planning on retiring in about 5 years.

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