Cashing Out Into An Early Retirement

Just finished reading the SmartMoney article on how a handful of couples have successfully retired early and found a balance and control of their lives. For some, who had seven-figure incomes, it was easier than for others, but even those with more modest middle-class incomes have managed to retire in their 40s and 50s. I would certainly like to do that as well. Of course, I always imagined myself not worrying about retirement since I will be a multimillionaire for some reason by then. But then again, it never hurts to have a backup plan.

So, here are some of the highlights:

• Set a goal and make a plan for your future
• If you want to retire in, say, your 40s instead of 50s, then save more rigorously and let stock market pick up the slack
• Find a source of additional income to either supplement your paycheck so you can save more money now and/or to supplement your retirement money once you do retire
  
• Live in the area with a lower cost of living if you can help it. You can save between 10% and 30% a year in living expenses by doing that.
• Make good investment choices with your set-aside money, don't let it sit in CDs or saving accounts. Stock market may be volatile, but over long term it delivers significantly higher returns than CDs, saving accounts, or bonds.
• Make a plan! If you want to retire 10, 20, or 30 years earlier, you have to plan for it, it will not just happen by itself!