How to Retire Early
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Link to a CNBC page for people who have done it. I don’t feel $1 - $1.3 million is enough for a couple, especially starting retirement in their 30’s and 40’s (even not considering health insurance), but they feel it’s enough.
https://www.cnbc.com/2018/03/28/steve-adcock-this-surprised-me-most-about-early-retirement.html
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Drop dead! That’s my only way.
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https://www.aarp.org/retirement/the-aarp-healthcare-costs-calculator/
using that. making a few assumptions. Estimated health care costs if they die around 78. They are going to need over $500,000 for just health care costs. yeah, I agree $1 million isn’t going too far.
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@backsplatter What assumptions did you make? I used it, and I think the numbers run way high. It also ignores the fact that you can manipulate your income and get on expanded Medicaid and pass your costs off on to society. Which is what I do, and I only pay for my dental (about $300/yr) and glasses.
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Yep, I ran it again. I must have read it wrong before. It’s only saying they need around $409K for healthcare costs.
The situation we are talking about doesn’t sound like someone who is trying to manipulate their income so they can pass their costs on to society. It’s more a discussion of income required to retire early. So we aren’t using Medicaid, it’s only counting Medicare covering some costs. Most of those costs probably aren’t going to be apparent to them till they get older.
Male 35. Already retired. 5’ 9" 195 pounds. Illinois resident. Live to 78. non smoker. High cholesterol
Female 35. Already retired. 5’ 4" 165 pounds. Illinois resident. Live to 82. non smoker. osteoporosis
Total Health Care Costs: $ 730,110
Covered by Medicare: $ 320,221
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Your Estimated Shortage: $ 409,889
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This is like retiring just for the sake of retiring. Even though I can retire, I want to do it in style. Few more years of work and use the money to upgrade to a home with a really nice view, big windows etc. Then travel at least 3-4 times a year and when at home, enjoy sitting in the nice view room goofing around on the stock market. But I am also using my financial freedom to make sure that I like the job - the day I don’t like it, I will quit.
If somebody does want to retire early, they should maximize their IRA’s, 401K etc and then when they have no income, they can tap into it. Sure may be there is a penalty but hopefully much lower taxes.
The other things to take advantage of - if the company offers it is things like unqualified retirement plans and non-deductible Roth 401K. And don’t forget the HSA.
It is amazing how much effect compounding can have on the money that you didn’t pay to the IRS and keeps growing for you.
