Retirement Calculators....Schmalculators

For the last 3 years I have been focused on when and how to retire.  I set an age of 55, which I thought was young.  I always read how most people retire in their mid to late 60s so I thought 55 was a very ambitious but attainable goal.  I would go to one of the various retirement calculators online and it would say I needed millions in the bank in order to retire.  I played with the settings and slowly made the calculator lie to me and tell me I could do it.  I’m not saying that saving millions is impossible I am just saying that I would need to save a lot  (which I can control) but I would need the market to cooperate and average 10-15% for the next 20 years (which I cant control).

  I don’t make a lot of money and my wife is a schoolteacher so our earnings are limited every year.  We are not worried about our next meal or staying warm but we also aren’t not biding our time until one of graduates from medical school and can finally start earning the big money.  I am sure we will both get raises, as the years go on, but I am just hoping that those raises keep up with inflation.

While online, doing retirement research, I stumbled across a blog called Mr Money Mustache.  The owner of the blog and his wife saved over 50% of their income every year, until the age of 30, and then retired.  I was amazed!  I had never heard of anyone retiring at 30 without winning the lottery first.  Immediately I went back to the retirement calculators to input a savings rate of 50% but I still didn’t come up with a final amount in the millions.  What was Mr Mustache doing that I wasn’t?  I kept reading his blog and realized that he had also figured out how to live off of $24k a year.  I always thought that once I retired (at 55) I could live off a small amount of money.  I figured that if I had no debt than all I would pay for is basic utilities, gas, food, taxes, and some luxury items.  That is basically what he is doing but he did it at 30.  I am beyond impressed at his dedication to save and then his ability cut spending down so his magic number didn’t need to be in the millions.

When I went back to the retirement calculators and put a new rate of saving, and a realistic rate of return, I got a number that sounded low a few weeks ago.  However, with my new spending plan I think I can retire much earlier than my late 60s.