Taking Early Retirement

I love this question. I’m partial, of course. I got laid off at 52 and I converted to early retirement. I was old enough if you consider 52 old enough. I had the savings. I talked about retiring early all time. Even my mother knew I would I would retire early. It was not a matter of if; it was only a matter of when.

You could probably retire today. I know. You probably think I am out of my mind. O.K. Maybe I am. OR maybe I’m not. How much do you need? Realistically you need to readjust your thinking about life and what is important.

What do you really need? Let’s look at Maslow’s Hierarchy of Needs. Maslow broke down needs as follows:

1. Roof over your head, food every day, sex (not in that order)
2. Safety (body, family, health, property)
3. Love (friendship, family, sexual intamacy)
4. Esteem (self esteem, confidence, respect of others)
5. Self Actualization (Morality, creativity, acceptance of facts)

So what is Maslow saying? You need some stuff. But the stuff you need doesn’t really cost a lot of money, does it? Do you see cable TV in the list? Do you see Starbucks Latte’. What about a pedicure or a massage? I think you get the idea.

Number one you need a roof over your head and food on the table. (Cost = ??) Number two you need a safe place to stay. (Cost = Probably included with #1) Number three you need someone to share you life with. (COST = A Little or a Lot) Number four is being able to commune with others. (Cost = nothing) Number five are things you have in your soul. There’s no cost unless you don’t have them. No amount of moeny will buy them.

So how much are we talking about? Well you know you can retire in Johnsville for $2060 a month. I guess the question becomes, can you live on $1250 a month?

The question should be how much do you have? If you have $500,000 total assets and you make 5% annually, your retirement would pay you $25,000 per year or $2000 or so a month.

Your next question becomes, where can you live for $1,000 a month? O.K. probably not in San Diego. Probaby not in Chicago, Boston, Orlando or a lot of places in the U.S, right? So you will need to look beyond the US borders.

Is that a bad thing? Probably not. Yeah, there’s a lot of talk about crime south of the border. But I know that every morning I wake up to hear the morning news on the clock radio and hear about killings, robberies, hold-ups, rapes, you name it; all that happened just during the night. We are supposed to live in a safest place in the world, and yet I have to ask how safe is it?

I don’t go out at night. I head home when the sun goes down. I turn on my outdoor lights on my front porch and back porch and on my garage every night, to keep away the thieves. Am I really safe. I wonder.

So what if I could show you a different place where it doesn’t cost a lot to retire. Even less than Johnsville? Let’s take Lee and Peg. Lee is 56 and she is 53. They live on $580 a month. Let’s call it $600 to round things out. That’s $7200 a year. How much do you need to have in principal at 5% to earn $7200? Can you say $144,000?

You probably have that much equity in your house. Or in your 401K, or in your Roth IRA. What if you don’t have that much in any of those things? Can you make $7200 a year at some online biz? You tell me.

The question is not can you can retire early? The question becomes will you retire early?

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For Taking Early Retirement (TER), I hope you are enjoying a great retirement or are close to that day!

Jeremiah John

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