Trimming Expenses

In my last post I mentioned that I was confident of my approach to early retirement. In addition I wrote about a couple who have been retired for 30 years by just following the 4% rule. One of the learning from that post is that there could be a huge drop in market that may hit my investments badly. In that case my investments may not keep up with my expenses. For example if there is a prolonged market slump. And I need a plan. The plan starts with cutting down my expenses temporarily so that my investments can catch … Continue reading “Trimming Expenses”

Thirty Years Into Retirement

It’s been barely three years into my early retirement. So, no I am not talking about myself here. I recently came across this article about a couple who retired 30 years ago. And they were 38 then. What great clarity they must have had of their future to retire in 1991! Since FIRE (Financial Independence, Retire Early) is a new phenomenon, there aren’t a lot of stories where people have been retired for a long period of time. Thanks to this couple, I have an opportunity to study their story and see what can apply to us. I wanted to … Continue reading “Thirty Years Into Retirement”

How and When I Decided To Retire

A friend and reader of my blog asked me this question — I don’t know if you covered this in the blog, but could you write about how you arrived at a number for net worth where you felt comfortable retiring. I have written about my retirement journey which is scattered across many posts. So I thought I should consolidate and revisit the topic for the benefit of new readers. The way I decided I was able to retire was when I knew that my corpus (investments) has reached 25 times my annual expenses + some buffer. That basically is … Continue reading “How and When I Decided To Retire”

How Long Will My Money Last?

How long will your money last? The oft given cliched answer is — it depends. It is true if you want someone to answer for you. But if you put some effort, you will be able to answer the question yourself. The only problem is that you should be able to make some good estimates of your expenses, inflation and investment return long into the future. This is a continuation of my earlier post — How Much Do you Need to Retire. If you haven’t read it, I urge you to head over there first. So by now you must … Continue reading “How Long Will My Money Last?”

How Much Do You Need To Retire?

I have touched upon this point briefly in step 5 of How to Retire Early in 5 Steps, but I thought I should expand a bit on that. Most people suggest the 4% rule, which basically states that if your expenses can be met by withdrawing 4% of your corpus, then that should be the corpus size. For example, if you need Rs. 50,000 per month to meet all your expenses comfortably in your retirement, then your corpus needs to be Rs. 50,000 * 12 / 4% = Rs. 1.5 crores. But does it really work?   For the skeptics, … Continue reading “How Much Do You Need To Retire?”

How Soon Can You Retire?

Like I mentioned in the previous post, there are really just two variables that you can control, which determine how soon you can retire. They are your expenses and savings. Remember step 4 of How to Retire Early in 5 Steps? Plan a Simple Retired Life. The lesser the expenses today, the less it will be in future after adjusting for inflation. If you like a rich lifestyle today, then as the years go by, not only will inflation cause the expenses to go up, but you will want higher and better lifestyle which adds up. Your savings will not … Continue reading “How Soon Can You Retire?”