Early retirement planning: case studies

Found this excellent thread at misc.invest.financial-plan about a 40-year old couple planning "semi-retirement" in 5-7 years and "full retirement" in 12 years. Their assets (net worth of about $1.5 M) and income ($240K-$260K) are well beyond ours, but I still found it very interesting.

Some notes:

  • They contribute an astounding 50% of their gross income to retirement and college saving accounts.
  • Their current asset allocation is 70% US equities, 15% International, 10% Bonds, 5% Cash. The suggestion from the group is to increase bond holdings gradually, leading to a 60/40 split of stocks/bonds at final retirement.
  • They use FIRECalc to do Monte Carlo simulations on their retirement withdrawals, I tool that I too have played with a bit.
  • For the semi-retirement period, they plan to allocate $10K/year for health insurance premiums. The response from the group is that this is on the low side.

Related posts:
Other early retirement case studies:


burntout said...

Quite inspiring. I am always on the lookout for such examples to encourage me to stick on the path to early retirement