5 Tips From Early Retirees -not good though

5 Tips From Early Retirees
by Susan Johnston
Monday, October 3, 2011

http://finance.yahoo.com/focus-retirement/article/113590/tips-from-early-retirees-usnews?mod=fidelity-buildingwealth&cat=fidelity_2010_building_wealth
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At 31, Robert Charlton had grown disillusioned with his job as a technical writer. "The idea of doing a desk job for another 30 years seemed painful to me, so I came up with this idea of trying to retire before 45," he says. He shared the idea with his wife Robin, who was then 31 and working as a travel agent.

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Robert read up on personal finance instead of hiring an adviser and looked at taxable accounts they could draw from before turning 60. During that period, Robin completed an accelerated nursing program to become a registered nurse. By age 43, they'd gone from $16.88 in their checkbook at age 28 to saving up enough money to leave both their jobs and live off the interest.

Now, years later, they travel the world, skydiving in New Zealand, hiking through India, sailing through the Chilean fjords, and documenting their adventures on their website, wherewebe.com. Although many people struggle to retire in their 50s or 60s, Robert believes it's possible for others to retire early as he and his wife did. "Really, we're very average people," he says, admitting that it's harder, though not impossible, for those with kids. "We never had power jobs. We just both took intelligent steps." Here are some of those steps.

1. Cut housing costs. The Charltons spent a year carefully tracking their spending to see where they could cut back. But as Robert says, "the truth of the matter is, we really didn't have that much fat to cut out." Still, they agreed to rent out half of the bi-level starter home they owned in Boulder, Colo., so they could pay off the mortgage and pad their savings. Switching from a 30-year to a 15-year mortgage also helped the couple reach their goal. "You save so much on interest that it does result in a higher monthly payment, but not as high you would think," says Robert. They later sold their house and put the equity into a bond fund.

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Robert and Robin Charlton (Photo courtesy of Robert Charlton)

2. Agree on your priorities. Instead of buying new cars, the couple kept their old ones, and Robin stuck to grocery shopping lists instead of buying whatever caught her eye. "That's how he shopped [without sticking to the list] so he was cut off from shopping," she says. Keeping their shared goal in mind kept their eyes on the prize. "We were both on the same page," adds Robin. "We both knew we wanted to put the money towards experiences." However, because they value travel so much, the Charltons didn't completely deprive themselves while saving up for retirement. As Robert says, it's important to "balance living for tomorrow with living for today." If saving feels like too much of a chore, it's easy to fall of the bandwagon.

3. Live below your means. Now that they've left the workforce, the Charltons live modestly by staying in hostels and focusing on less expensive travel destinations. They estimated needing between $30,000 and $40,000 annually, and they've managed to stay in that range, though they're averaging closer to $40,000. Earlier this year, they splurged on a trip to Italy and Switzerland for their 25th wedding anniversary. However, Robert says, "we typically have tried to travel places where the dollar goes further, like Argentina and Chile, where the exchange rate was in our favor." Destinations like India and Nepal have higher airfare but low day-to-day expenses so they stay for several months at a time to balance out the airfare costs.

4. Stay in the game. Although the Charltons' portfolio has had its ups and downs, they've resisted the urge to try to time the stock market or get out altogether. "We did some of our best investing during the bear market of 2000 to 2002," says Robert. "We bought stocks 'on sale' and reaped the rewards afterwards." Although he says they could have gotten a higher return on investment if the timing had been different, they also underestimated future earnings, so that helped them reach their target more quickly than planned.

5. Don't rule out temporary work. Dips in the market have made it more challenging for the Charltons to live off their interest. So when Robert was offered a six-month consulting project in 2009, he jumped at the opportunity to rebuild their capital. Although he'd once dreaded going to work, he actually liked the temporary arrangement. "I genuinely enjoyed working hard during that window because I knew it wasn't endless, which was the thing I found challenging early on when I first came up with this plan," he says.

Robin adds that they're open to making adjustments as they go or returning to work if needed. However, she values the chance to travel and be active while they're young and healthy. "Working as a nurse, I realize so many people save so much and a lot of people don't get all the years they thought they'd get," she says.

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SO What
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SO What 39 seconds ago Report Abuse

whatever

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TEA
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TEA 41 seconds ago Report Abuse

Did I miss how they pay for healthcare? I'm self employeed and it costs me almost $20K a year for average healthcare (for 2 adults - no major health issues). I have the real kind, not the scams that are out there that won't step up to the plate when needed. Maybe, that's why they pick up extra work, for the benefits when needed?

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JOSEPH
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JOSEPH 48 seconds ago Report Abuse

They will be back to working at 50 But Yahoo wont run that story WHat a fairy tale

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Rose
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Rose 54 seconds ago Report Abuse

My best friend ,she just has announced her wedding with a millionaire young man Ronald who is the CEO of a MNC ! They met via---ŠearchRichṨinġles.ČОM---.- ..It is the largest and best club for wealthy people and their admirers to chat online…You don’t have to be rich there ,but you may meet one ,maybe you wanna check it out or tell your friends !

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kimberlyd
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kimberlyd 56 seconds ago Report Abuse

About the article retiring at early age. I have one thing to say no children!!!! If you factor children into the equations not possible.

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Rachel
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Rachel 1 minute ago Report Abuse

I agree with some of you - children are more important than retiring early and traveling but some people CAN'T physically have kids.

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Leon
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Leon 1 minute ago Report Abuse

What is a hostel? It says they stay in hostels.

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Stacy
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Stacy 1 minute ago Report Abuse

why are people so negative about successful people? I retired at 48. My husband will retire at 55. Even in a down economy, we save, don't spend and look at where we will be in the future. Not easy saying NO to the latest and greatest technology, cars and houses but we did it. I say congrats to both of them.

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James
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James 1 minute ago Report Abuse

Not the typical couple at all- no kids, nomads by all accounts, this is not the life most people want

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theonlymaskman
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theonlymaskman 1 minute ago Report Abuse

This strategy is going to backfire on them. They have left the workforce too early. Just how much have they saved in the short amount of years they worked? They not not earned either social security or pension benefits. So they are living off the returns of investments. The continual withdrawal of funds to cover their spending will drain their savings. They will eventually be forced to return to the workforce but will have to settle for less salary than usual due to the loss of valuable experience time. This is a poor model for others to follow as this couple will inevitably fail with this plan in place.

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