Good advice from everyone. I pulled the ripcord at 54 1/2 (6 years ago) and my wife followed 2 years later. Ah, that first 2 years, nice. Our key was no debt. We bought our first house in 1978 and through a combination of laziness and swamped at work are still living in it. We paid the mortgage off in 1998. I use Qucken software to track all my bank accounts and investments (personal and 401K plans). The key is to understand your spending. When I started using Quicken a couple of years before I retired I input 2 years worth of check registers and bank statements so I could see where the money went. We actually spent very little of our income after backing out the sizable deductions that would go away in retirement....like income taxes, social security/Medicare, employee stock plan, 401K contribution, self directed IRA, supplemental insurance...it really added up. With that knowledge we found we would actually have more spendable income from an early retirement pension at 55 plus earnings from our savings (up till then reinvested) than we had from our jobs. So when the opportunity came for a layoff I volunteered and was turned down. I then gave the obligiatory 1 day notice and quit. It has been great. I ride my bicycle 3 days a week with my neighbor to keep fit and volunteer at Habitat for Humanity building houses. In the last 5 years I have helped build 29 houses. There are a whole bunch of retired engineers (like me) there as well as others from the trades and other professions. We have an absolute blast. Oh yeah, and we go sailing too in our first boat..a H34 we bought new in 1985. In fact, we still have our first car too, a 1976 Bronco bought new. We have other new cars too, so its not like we haven't enjoyed new stuff over the years, I just can't seem to get rid of things. Probably from being an Air Force Brat and moving every single year as a kid only going to one school (4 th nad 5th grade) two consecutive years. But I digress...
The key to not outliving your money is to only withdraw 4% per year of your savings via earnings and have it equally divided (minimizing risk) between fixed income like CDs, bond funds or bonds and a no load stock fund like the S&P 500 or the Total Stock Market Index Fund (that will grow over time hedging against inflation) at Vangaurd. Vanguard had some good recommendations on books to read as does
www.bobbrinker.com that will help you figure out how to invest smartly. Don't pay anyone to "manage" your money. The rest of our income comes from my wife's pension and eventually our social security checks. Our biggest expenses are still taxes followed by insurance (home, boat, auto, now medical which is a lot!) and then groceries at around 8%. Everything else seems to be below 1% each and we keep really active eating out, movies, cable tv etc etc.
You may be a bit young yet, but this is a great time to start planning and tracking for your income needs. That way you can figure out with the 4% rule plus any external sources of income like pensions, rental income, part time job, etc how much you will actually need to make a sustainable go of it. Make sure you are healthy...i.e., don't smoke, get regular exercise and eat right. Kids can help fund thier own college educations via jobs, loans, etc. Remember they don't give scholarships for retirement.
Allan
