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Wednesday, 28 November, 2007

How To Retire At Age 40
(with comments)

I'm too old for this, but you youngsters might want to consider it: Retire at 40: Here's how.

If you were to take 20% of your annual income starting at age 20 and put it in a fund following the S&P 500 Index ($INX), that fund continued to grow at the long-term historical rate (12%) and you received a 4% raise each year, you could walk away from your job and live off the interest at age 41 matching your current salary -- or quit at 43 and be able to give yourself a 4% "raise" each year from the interest, which is probably the better plan because it combats inflation.

This would be a good spreadsheet example. I'll do it when I retire.

Permalink | Posted in General |
  1. By Miss Cellania. Comment posted 28-Nov-2007 @09:39am:
    Let's see, when I was twenty, I made $3.05 an hour. That's a little over $6,000 a year. I also paid rent, school loan payments, car payments, and all the other usual bills. Saving even 1% would have been a real hardship at that time.

    I was also a lot skinnier then.
  2. By mb123. Comment posted 28-Nov-2007 @10:48am:
    Oh yes, in la-la land, the S&P 500 index returns 12% a year. A more realistic expectation would be around 7-8%.
  3. By Anyone. Comment posted 28-Nov-2007 @11:01am:
    I retired at age 38. I didn't hole money away so some investment banker could charge me a fee for using my hard earned savings, either. Instead, I continually "reduced my liabilities".

    Credit Cards? I have none. I ate rice and ramen noodles until the age of 25 so I could pay off ALL of my credit card debts.

    Car payment? None. I bought one new car in the past 20 years, and paid it off faster than the loan schedule dictated. All other vehicles were used, bargain-basement, but suitable for my needs at the time.

    House? I paid it off much quicker than the repayment schedule.

    Now, my monthly bills are nominal. House Insurance, Car Insurance, Health Insurance, Property Taxes, and Utility (electric, internet, tv) Bills. Unsurprisingly, "insurance" is more than half of my monthly expenses.

    With everything paid off, and me living comfortably in a lifestyle that "meets my needs", it was easy to retire.
  4. By Sheldon. Comment posted 28-Nov-2007 @11:44am:
    I graduated from college with a theater arts degree. The only way I'm retiring if I got the movie/tv role of a life time. I quit acting back in '90 though, (I was in 2 movies: "Neon City" and "You're Boyfreinds Back") so that's probably not happening, and I'm not making music for money either, so I guess I'll be working and commenting here for a looooong time....
  5. By J-Walk. Comment posted 28-Nov-2007 @11:55am:
    Hmmmm... were those very small roles Sheldon? I looked up both movies on IMDB and they don't have any actors in common. Assuming that you meant "MY Boyfriend's Back."
  6. By Banjo Brad. Comment posted 28-Nov-2007 @12:09pm:
    When I started working, I tried to get the company to agree to paying me for one month's work, and I would then work free for the next 40 years. They refused.

    I wanted them to play me $0.01 the first day, then double the previous day's pay each day for one month.

    If they paid me just the amount of each day, I would have earned $10,737,418.24 in a 31 day month. If they compounded each days pay throughout the month, I would have made $21,474,836.47. Even in a bank at the then rate of 2% standard interest, I could have lived comfortably.

  7. By Sheldon. Comment posted 28-Nov-2007 @12:25pm:
    I was an extra in both of the movies. For "Neon City", I played a bum. My big part was when a guy pulls out a gun in a crowded market, and I am directly in his way, and I get really scared and get the hell out of the way. I had fun with that.
    In "My Boyfreinds back":
    I was a zombie. It took all day for them to shoot me and a bunch of other zombies standing around a dinner table with the main actress on it, with dinner plates saying "eat... eat...". They didn't use the scene for the theater release, but hopefully it's in the DVD, if it's out on DVD? Anyway, when I said my line, I made it higher pitched then everyone else, and made funny faces, which the director seemed to like, and wanted me to do more stuff, but I was so bored with the whole process I never did...
  8. By wally the duck. Comment posted 28-Nov-2007 @12:43pm:
    The S&P is at a net gain of zero for 2007.
  9. By Anyone. Comment posted 29-Nov-2007 @11:44am:
    You don't need to be a millionaire to retire in comfort. You just need enough money to pay for your monthy expenses. That amount can be very, very low if you realize that "everything that glitters is not gold".
  10. By RobertSeattle. Comment posted 29-Nov-2007 @02:58pm:
    I think my perfect world would be to work 5 years, take a year off, work 5 years, take a year off until I truly need to retire. That would be very cool.
  11. By Cubbybear. Comment posted 30-Nov-2007 @08:31pm:
    Wasn't it M.K. Gandhi that said, "The less you have, the less you need"?
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