I don’t know about you, but I choose to retire early while I’m still young, at least young at heart. But it seems nearly every article, book or post I read is about how to grow a million dollar nest egg first.
Having a million or more “in the bank” is a great option, but how many of us have been able to do that?
The first tip they offer is work until you’re 70 then draw Social Security. Who the hell wants to work until they’re 70? And while that may make sense for someone who loves their job and is in stellar health. What about the rest of us?
Then they go on to tell us what stocks to buy. That might be a good option if you are in your twenties or thirties, but not so much if we’re in our fifties and sixties. It can take years for stocks to grow profitable and remember what happened in 2008 when many people lost their entire retirement savings.
First, let me just say that I am NOT a financial advisor and anything I say should not be taken as financial advice.
The way I figure it there is a couple of ways to retire early without a huge nest egg. Start preparing as soon as possible, like NOW by
- eliminating and reduce debt
- start making more money
Eliminate and Reduce Debt
If we want to retire early we gotta get rid of that ball and chain named debt!
Pay credit cards off.
- Start with the biggest balance and highest interest rate, pay that one off then start on the next one. Hopefully, you don’t have a boatload of cards. And of course, continue to pay the minimum on all remaining cards.
- Look at your card statement, there is a section that says Payment Information. In that section should be a box that says Only Minimum Payment and years to pay off, perhaps 15 years, (what?!) then a larger amount and says much fewer years, perhaps 3 years, and the amount of interest you will save.
- In all probability, that larger amount is just a few dollars more. Take your lunch to work for one week each month rather than buying lunch daily add that amount to your minimum payment and you can have your card paid off in 3 years rather than 15! Plus, you can prepare a much more nutritious lunch from home.
If you still have cable or satellite TV, cancel it now!
- You can pick up an HDTV antenna, I use this one on my rooftop an outdoor antenna is best, but I have seen indoor types that work great even in kind of rural areas. One-time cost from $65 to $140. Monthly savings could be over $100.
- Gotta have a DVR? TiVo, the original DVR has options for antenna reception. It is a subscription service at $14.95 per month for each DVR but that beats $60 to $150 each month.
Pay off your car loan.
- Did you know that paying just one extra payment each year could take a 60-month contract to 49 months? And save several hundreds of dollars in interest. Use some of your income tax return to make just one extra.
- Rounding up your payment to the nearest $50, say $212 to $250 could cut 60 months to 47 months.
Choose either option and you can have that car paid off around one year sooner.
Oh that mortgage payment! The number one largest monthly output. The single biggest obstacle to the ability to retire early.
- Increase your monthly payment by 1/12th each month.
- Make one extra payment each year.
- Make 1/2 of your payment every two weeks. By years end you will have made 13 payments.
All of these options equate to making 13 monthly payments every year, the loan will be paid off in 26 years, instead of 30.
Cell phone charges.
- Take a close look at your cell service statement. Are you paying for cell phone insurance? If your phone is older and you’re not paying a monthly installment to purchase the phone itself, you don’t need insurance.
- Using a protective phone and screen cover like this one for an iPhone would be a onetime cost of around $15 can save your phone if dropped and at $8.95 per month for the insurance will save $107 and change per year.
- How about your data (internet) use? Are you using less than you’re paying for? If you have had the plan for a long time, your provider may have newer plans that can save you money.
Healthcare in our golden years can cost a ton of gold. Many of us have been sitting at our job for decades. Starting out our retirement years with a healthy body will save money plus a healthy body promotes a healthy brain.
Get out and move
- Not necessarily calisthenics, racket ball or running, if you do these things already, by all means, keep it up! For the rest of us just walking briskly, fast enough its hard to carry on a conversation, for 30 minutes 3 days a week will suffice. Of course, 5 days for one hour is better.
- Make that a walk in the hills or a hike in the mountains to enhance your workout.
- Take a Jumba or Jazzercise class.
- Put on some good ole rock-n-roll and dance up a storm.
- Got a swimming pool nearby? Doing laps is another great way to get some exercise.
- Give bicycling a try. You don’t need to be an active cyclist to reap the benefits, ask the dealer about a “comfort bike”, they are made just for older folks like us, low impact and comfortable.
Whatever your choice do it fast or hard enough to get your heartbeat up to about 150 beats per minute, ( 220 BPM – age). Remember the song “Stayin’ Alive” from the movie “Saturday Night Fever”? The beat of that song is about 100 BPM. I learned that while working in the veterinary clinic where I did a lot of heart rate monitoring.
Use your muscles
- Strength training. Working out with weights 3 times a week is an excellent strategy. Don’t worry about looking like Arnold Schwarzenegger there’s no need to lift heavy weights. Most Medicare plans cover gym memberships and there should be someone there to show you how to use the weights.
- Yard work and gardening. Mowing the lawn, weeding and pruning can be quite a workout. Bonus, homegrown fruit, and vegetables taste much better than store-bought.
There you go, six days of health promotion taken care of. Go ahead and take Sunday off to relax. ?
More organic fruits and vegetables. The vast majority of factory grown food is laden with pesticides, and herbicides. The soil it is grown in is depleted of minerals.
Find a Farmers Market to buy fresh fruit and vegetables. They can be found all over during the summer and fall in cities and suburbs.
In the off-season look for organic frozen vegetables at the grocery store. Got a Costco membership? They have hundreds of organic food choices and always adding more. In fact, most grocery stores are beginning to offer more organic choices, I know Kroger does.
Less or no meat. Factory farmed meats are pumped with hormones to build muscle quicker and they are fed huge amounts of grains to put weight on faster and antibiotics to protect from disease due to the less than sanitary conditions of cramped housing.
- If you must eat meat, find grass fed beef. Buy free range chicken.
Cow’s milk from factory dairy farms contains synthetic hormones given them to produce more milk.
- Options? Organic nut milk like almond and soy. Organic milk from the grocery store or find a local dairy farmer who sells raw milk.
Many commercially produced grains are genetically modified, meaning gene-spliced with glyphosate the main ingredient in the weed killer Round-Up so the grain can be sprayed along with the weeds and not die. Spraying alone is cause for concern since glyphosate is a hormone disruptor.
- Eat only organic whole grains in moderation.
- Look for ancient grains like Amaranth, and Einkhorn.
- Always look for the Non-GMO label
Stay as far away from prescription medications as you can.
If you are in ill health, there is no way you can retire early. Especially if you depend on insurance provided by your employer.
Cholesterol-lowering drugs have been linked to muscle damage, Parkinson’s-like symptoms, and muscle aches and pains and memory issues. The medical community has now come to understand that cholesterol does not cause heart disease. (Dr. Mark Hyman) In fact, the brain needs cholesterol to function properly.
Heartburn medicines like Prilosec, Prevacid, and Nexium may raise the risk of dementia.
Over-the-counter antacids may raise blood pressure
Just to name a few.
Make More Money
The Trump administration hopes to cut Social Security and Medicare leaving millions of Boomers even worse financially. (Brookings https://www.brookings.edu)
On the other hand, Trumps Tax cuts for 2018 favor business. Why not take advantage of the tax deduction benefits of having a home-based business?
Start a side business or two. A job is just not stable anymore. Outsourcing to other countries, cutbacks, especially “out with the old and in with the new”. Sadly, companies are getting rid of older workers to make room for younger ones.
A side business you begin NOW while you’re still working could save you when your company makes cutbacks or
- If you can no longer do the job you currently do
- If a loved one needs you to care for them
- If the economy falls again
- If you just can’t stand your job any longer
- Bonus! Learning how to create and run a business can help keep your brain function from deteriorating.
A side business can carry you through until you find another. It can supplement or even surpass Social Security!
It has been said that just $300 to $500 extra each month could save families from bankruptcy.
Building a side business while you’re still working can increase the likeliness that it will succeed. Having the steady income can help you from stressing about making enough in your business to survive.
When you have built up enough income, you can give your job the ole Johnny Paycheck and tell your boss to take this job and shove it. How many times have you wanted to say that?!
By starting a side business while still having a steady paycheck you can be ready for whatever comes your way.
Create multiple streams of income.
We all know that Social Security alone will not be enough to live on when you retire early, but Social Security, a home-based business that can be worked from anywhere (a laptop biz), a hobby turned biz, a part-time or seasonal job that you LOVE, can create multiple streams of income.
What are you good at? What are you passionate about? Can your current job become a consulting job? Now could be the time to pursue that thing you’ve always wanted to do!
Here’s a few ideas, some we will explore in the coming weeks. Be sure to get updates to the blog so you won’t miss out while we discover how to retire early even if you don’t have a million dollar nest egg.
- Sell a product
- Building websites
- Writing eBooks
- Affiliate marketing