Work Free!

As I’ve mentioned, I’ve felt very stressed out lately, mostly about work. Jim’s been experiencing the same thing which leads us to moan to each other in the evenings and dream of how great it would be to be retired.

Jim’s gone so far as to roughly calculate what we need to save in order to retire- $2.5 million. With $2.5M we could invest it in bonds (pretty safe 5% return on average) and live off the ~$100,000/year interest. He’s predicted that with careful planning we could realistically have this in 22 years.

22 years sounds like a short time to collect that much money and it is when that figure is based on maintaining current living standards (mortgage, 529 and 401K contributions, vacations, etc.). I’d be 50 in 22 years – about 15 years younger than most people anticipate retiring. Also, at the rate we’re paying off our mortgage, we’ll outright own our home in 21 years which means that we’d have no house payment during retirement and could enjoy spending the money we pay for our house on living (Egypt better be safe in 22 years because I plan on going!).

I’ll tell you though, 22 years seems like an eternity if this stress-level was maintained.

The downsides of retiring early? To retire at 22 we BOTH have to maintain our current earning rate. That means I have to continue to work full time- something that I was hoping not to do once we had kids. Also, at 28 being retired sounds like it could get kinda boring. Provided we have another kid in ’09 we’ll still have kid(s) in college 22 years from now that we intend on financially supporting (here’s hoping that today’s 529 contributions take care of most/all of that…). Given national statistics on saving, we probably won’t have many people our age retiring in their early 50’s to hang out with. Good thing we like each other!

Jim gave me another option for his retiring early – I move to P&G Marketing, become a [marketing] rockstar, advance to director, and make enough for him to drop down to a reduced workweek. Good plan for him!