Need retirement advice

[ioticus]

I'm 36 years old and single. I work 40 hours a week in retail pharmacy and earn about 95k per year. I've saved 450k, which I have invested in CDs and I-bonds averaging about 4%. In addition, I have about 68k in a 401k and about 18k in a Roth IRA. I max out my 401k by deferring 18% of my salary. My company matches 80% of the first 5% deferred. I cannot contribute any more to a Roth because my income is too high. I own my own home, which is valued at about 150k. I have no debt.

I hate my job and would like to retire as soon as possible. I really enjoy my time off but am miserable when I'm working. I'm the type of person that doesn't need a lot to live on. My car is a 92 Buick and I plan to drive it until it falls apart. My question is when can I realistically plan to retire? How much would I need to save? What steps should I take to be able to stop working as soon as possible? Another possibility is I could work one day a week and earn about 30k per year, but I would really rather stop completely.

Any help appreciated.

[terry1156]

I guess the first question is what is the minimum amount of yearly income you need to survive? Once you have determined that, you can begin to make the calculations of what you need to do and how much you need to be able to retire.

Your $450k at 4% is giving you $18,000 a year in income. My guess is that is not enough so you'll need to build your savings up a bit more. If the job is really stressing you out, I would consider moving to one day a week which would give you $48,000 a year. Then I would spend the days off finding out what it is you really like to do and try to make that into an income generating job.

By saving as much as you have, you are actually in a very good position to do a lot of things. I think what you need to do is think about exactly what you'd like to do, what is the minimum you need to live on and then work on a plan to make that happen.

[34saving]

I agree the 1 day a week thing might be a good "trial period". Plus, I'm betting that you have some sort of license to keep up? I bet that the biggest thing stopping you from retiring is the same thing that stopping me from retiring -- health care. Luckily your insurance (single male in thirties) is probably a lot cheaper than mine (family of 3 and possibly growing). Keep in mind healthcare costs will keep increasing until you get to Medicare age (assuming Medicare is still around then.) Have you ever considered a passive income generator like being a landlord? (Okay, it's not totally passive, but it's not like going to work everyday either . . .)

[ioticus]

Originally Posted by 34saving

I agree the 1 day a week thing might be a good "trial period". Plus, I'm betting that you have some sort of license to keep up? I bet that the biggest thing stopping you from retiring is the same thing that stopping me from retiring -- health care. Luckily your insurance (single male in thirties) is probably a lot cheaper than mine (family of 3 and possibly growing). Keep in mind healthcare costs will keep increasing until you get to Medicare age (assuming Medicare is still around then.) Have you ever considered a passive income generator like being a landlord? (Okay, it's not totally passive, but it's not like going to work everyday either . . .)

I haven't looked into the cost of private health insurance. I have health insurance thru my company and they deduct about $80 per month from my paycheck. My house is a duplex and there is also a small house in the backyard valued at about 30k (forgot to mention that earlier). I could probably rent both houses to 3 college students for about $1,200/month. I was thinking of moving to a condo and using the rent income to pay my own rent. My house is a pain in the winter time because they don't plow my dead end street and you have the other hassles of owning your own home like mowing the lawn.

I really didn't want to use the interest on my CDs to live on. Instead I wanted to save all my interest for retirement, which is the main reason I haven't gone to one day a week. 18k from my present savings is not enough to live on.

[robex]

Read the book 'Stop Working...Start Living' by Dianne Nahirny. She retired at 36. I think sometimes we all think we need more money to live on than we really do. I just went through this with my Mom. It was a tough decision, but once she decided to take the plunge, well...I've never seen her so relaxed.

[Snoopy2645]

Well you mentioned you have a some rental property now how about buying like a small apartment complex or something? I think right now rental property is the only thing I would trust to make more than cds & such I am not a gambler so I dont like dealing with stocks kwim? I think when I save some money I will use it to go into rental property myself