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How the average person can save money quickly and easily

Removing Obstacles to Retirement

ro-3It’s Wednesday afternoon. The weather is sunny but with a hint of Fall coolness in the air. You are at work, and you would rather be anywhere else that doesn’t involve a dentist’s drill.

You are somewhere between 50 and 55 years of age. That’s close enough to have a glimpse of retirement, but for too many not close enough. Retiring at 65 is becoming a distant dream for many Baby Boomers as 70+ is the new normal. Does it have to be this way? Is it too late to even dream of retiring early?

Surprisingly enough, the answer is “no.” But the worker who wants to retire at 62 must take the steps removing obstacles to retirement.

$75,000 is your magic number. Get to 75k, and you should have enough to bridge the gap to full Social Security. Will it take some lifestyle changes? Almost certainly. But the goal of retiring early is more important than the new Galaxy S 10,000 GT, or whatever your cell company comes up with next. If you have a vested retirement fund, your savings goal is only $50,000. How will you reach your goal?

17 is Your New Favorite Number: Put 17% of what you make in a fund that you can’t touch until you are 62 years of age. That feels like a lot but as the nest begins to clear your expenses will go down organically. You won’t need to buy that tuxedo for orchestra the first day of school anymore.

Invest 5%: Individual investors tend to be not great at timing the market. Check that, because it is too kind. Individual ro-5investors are almost uniformly bad at timing the market. Invest in index funds so that you don’t miss the next recovery. Five percent, like clockwork. You’ll be surprised what it becomes when it grows up.

Downsize: The house you live in has a lot of great memories. As the kids grew, pencil marks on the wall documented the growth. The spacious backyard hosted Wiffle Ball games, barbecues, and the occasional (all right, frequent) stay at home camping trip.

Every room has memories that you can hear speak to you if you listen carefully enough. But you don’t need that much space anymore. A smaller home, with smaller payments and less expensive upkeep, is the wise choice now. A smaller place can turn into a major portion of the savings that we have talked about so far.

You can do it! Make your goal of early retirement as important as your goal of advancing in the business world was way back when. But the next time you want to buy the Apple Watch, buy Apple stock instead.


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