Episode-173- Early Retirement Reality Check
Last week I wrote about Social Security and how it was wise to not bet on it as a reliable source of income for the future. My writing mostly focused on the lack of control one has with that system and the dependence it creates. Pay now get later schemes have never been my cup of tea especially when the pay now part is not optional. This has inspired me to do one of my semi annual reality checks on my life goals which center on how well my family and are preparing financially for the future. One main driver for ToDoListHome.com is to retire by age 55. Retirement to me means that I am still working but no longer reliant on my current wage for support of my lifestyle. I am still 8 years from my goal and at time it seems impossible to think about it let alone achieve it. That is why it is still a goal. It’s a worthy challenge and one that can be achieved with integrity, ingenuity and perseverance.
Now that all the plants are in the ground and the three honey bee hives are gearing up for summer I have some time to do an early retirement reality check. I know I could reach to goal easily by increasing my savings to 75% of my take home pay but that would involve moving to a trailer in West Virginia and I’d probably have to move there alone. My current wage is dependent on living in close proximity to my office and that requires living in American suburbia. So easy reach of my goal is not in the cards at this time.
Two years ago I set out to build communities on the web and in my neighborhood that are centered on what I love to do. If you have been following along you know it involves doing things for a better life and showing others how to do them too. I chose honey bees, gardens and preparedness as my theme because I love doing things to make them happen. There are good markets out there for people who want to provide good things in their lives as as well as others. If I work hard at what I love to do the rewards will follow and I will be busy growing more than in just my backyard. ToDoListHome.com has potential but my early retirement reality check requires more thought and planning to other aspects of my life.
My early retirement reality check has provided a list of actions I must take in order to enhance my preparations for the future. Just as I follow permaculture principles in my gardening and bee rearing techniques I must also apply them to my retirement planning. Retirement is a tenant of preparedness and just as it can take years to get fruit from a tree the same holds true for retirement. I realize more than ever that principles such as Observe and Interact, Catch and Store Energy and Obtain a Yield can also be applied to preparing and realizing the future I anticipate. Integrate and Rather Than Segregate is another principle that I will discuss briefly today. I see how well it works in the gardens and if I want my life to imitate nature at its best then its time to evaluate the integration of my investments. I have been plagued by an overwhelming lack of confidence of keeping everything stored as electrons on bank computers but now I have reached a point where greater diversification is in order. This enhance a sense of hope for the future and the fact that it will most likely arrive in tact rather than tatters.
I’ve recently read Early Early (Make The Smart Choices) by Steven Silbiger and The Savage Number (How Much Money Do You Need To Retire) by Terry Savage. The Savage Number was a much better read and I will provide a review of that very soon. As a result of my reading and other research and some consulting with the fine folks at Vanguard I have started a Roth IRA and I am getting prepared for Virginia’s 529 College Savings plan for my children. The main reason for these actions are the tax advantages they provide versus some other savings plans. The Roth IRA will allow me me to withdraw funds in retirement tax free which I think is important as taxes are bound to only go up. It’s a better deal to pay the taxes I know now versus waiting for taxes in the future. Virginia’s 529 plan will allow me to deduct my contributions from my state tax obligations. Other investments have prevented these actions from being considered earlier in my life and I know I still have time on my side to influence my expenses in the future.
I must also adhere to my 6 question plan for purchases much more diligently with each passing day. In previous episodes where I discussed early retirement I presented a plan I got from Jack Spirko of TheSurvivalPodcast.com and I wish to share with you again. If we all incorporate these questions into our purchase plans more we will have more control over how well prepared we are for the future.
6 Question Pre-Purchase program
- Do I need it?
- Does anything I have fill the role now?
- How long will it last?
- What will it do for me and my family?
- How long must I work to pay for it?
- If I don’t buy it what difference will it really make?
Don’t forget to: Monitor your budget with our budget worksheet and Make a one year wish list and add up the items before making purchases.
My other actions involve getting better at the things I love to do and making more and better content for you on the web. By providing services and information on that result in making the lives of others and my own better then the future I envision gets closer to reality with each passing day.
That’s it for today now go and plan for a better future. There’s lots of ideas how to do so at ToDoListHome.com.
- Episode-168- Don’t Bet On Social Security
- Episode-122- Save Money Without Cable
- Episode-82- Empire of Debt – Book Review
- Episode-16 – Retire Early, Regain the Freedom of Financial Independence
- Episode-41- Early Retirement System – Step 1 Save More Money
- The Retirement Gamble
- The Story Of Stuff
- Drop the cell phone plan (adjustable for any monthly payment plan). Formula ($X * 300)/$Y = Number of months retirement is delayed. X= monthly cost, Y = monthly savings for retirement
- Sustainable Withdrawal Rates From Your Retirement Portfolio
- TheSurvivalPodcast.com – Episode-278- Preparedness As A Retirement Plan
- TSP Common Sense Versus Consumerism
- TSP Episode-766- Jacob Lund Fisker from Early Retirement Extreme
- Early Retirement Extreme