Retirement

Escape The Cubicle Walls Via Retirement

I have a good friend who will probably retire at the end of 2010 at the age of 54. He is very careful with his money and saves a ton. I have no idea how much he has saved but it wouldn’t surprise me if it was in the $800,000 to $1,000,000 range.

As much as my friend hates his job, he probably hates the company he works for even more. And I can sympathize with him because I used to work for the same organization until they eliminated my job. The company is truly one of the worst I’ve ever worked for. But I digress.

One evening over drinks he was telling me his plan was to live off an annual income of 4% of his investments. So if he has saved $1,000,000, his annual income will be $40,000. That’s a pretty nice retirement income and it doesn’t even include social security.

Unfortunately, the majority of the population will never have $800,000 to $1,000,000 saved when they decide to retire. Is it possible to retire with less? Maybe.

Let’s say you were able to accumulate $500,000 in savings/investments. Using our 4% forumula, your annual income would be $20,000.

But can anyone realistically live off of $20,000 a year? Fortunately, the answer is ‘YES’. At the end of this post is an interesting article from an AARP bulletin titled “Fabulously Frugal: Living Well on Less Money”.

The article reviews three people who have retired and are living off their savings and investments. Be sure to check out the “Yardley-Dwinell Annual Budget” located in the left-hand sidebar.

To your success,

- The NetKnucklehead

Read “Fabulously Frugal: Living Well on Less Money” Article at AARP website.

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