Financial gurus: How can I retire at 60?

how to do this wrote:

Flagpole wrote:

how to do this,

1) Don't listen to those who are telling you not to pay for your children's college. For all we know, this is a long-lasting promise you made to them or something you or your ex really want to do. I take that as a given.

2) Good Lord, you can EASILY do this.

3) With $700,000 already, plus your contributions over the next 7 years (I just did 7 years, not 8), that money at just 5% gain annually will be worth $1,243,671.97 when you are 60. Do NOT touch that money at age 60. Start withdrawing at age 62 (I will give final totals later).

4) You will fund your children's education with your income over the next few years, so this is just an expense (like paying for electricity), so you need to budget for that, but it will not go into my calculations.

5) Regarding the house, if you want to leave the area, do that, or if you want to stay in same area but with smaller cheaper house, do that. If you want to stay in that house, re-consider. Is your house too big for a dude about to have all children gone? I am going to assume a sale in 8 years. With Realtor fees and moving expenses, I will still keep your net gain from sale at $380,000. I will take off $140,000 for amount you likely still owe on it by then. That leaves $240,000. Go find a nice $180,000 house somewhere. Buy it. Bank $60,000.

Sample $180,000 homes from around the country:

Surprise, AZ -

http://www.realtor.com/realestateandhomes-detail/15944-W-Quail-Creek-Ln_Surprise_AZ_85374_M21520-32352

Grand Junction, CO -

http://www.realtor.com/realestateandhomes-detail/473-Duffy-Dr_Grand-Junction_CO_81504_M26527-37615

Clearwater, FL -

http://www.realtor.com/realestateandhomes-detail/1581-Lotus-Path_Clearwater_FL_33756_M65623-97543#photo0

Austin, TX -

http://www.realtor.com/realestateandhomes-detail/7111-Thannas-Way_Austin_TX_78744_M70558-40375

Carmel, IN -

http://www.realtor.com/realestateandhomes-detail/501-Walbridge-St_Carmel_IN_46032_M41310-09041

Bellingham, WA -

http://www.realtor.com/realestateandhomes-detail/17-Little-Strawberry-Ln_Bellingham_WA_98229_M15308-28319

6) So, at this point you have no mortgage and $60,000 from the proceeds of the sale of your house. You also have $190,000 extra in utilities and emergency fund (you should sell those utilities -- too risky for a retired person -- should go in diversified mutual funds).

7) Now, retire at age 60. Spend $180,000 of your money listed in #6 above over 3 years to live on leaving you with $70,000 emergency fund. You are now 63, and your 401k money is now worth $1,439,705.77 at still the paltry gain of 5% annually.

8) Take 4% of the $1,439,705.77 and that is $57,588.23, so that right there is almost enough. Honestly, with zero debt and kids gone, you COULD live on that if you wanted to, so retirement is ALREADY a possibility. BUT, you now get to add Social Security, and at age 63, you will get $30,612 based on a current salary of $80,000 (just a conservative guess). So, now you are up to $88,200.23. If you can't live on that with zero kids around and a paid for house, then you've got problems.

Make it happen, brother.

Thanks Flagpole, and others who responded! I have printed off your response and am going to study it! I appreciate the insight.

To answer some of the other replies, here is approximately what I spend each month (I actually do track all my expenses in a Google spreadsheet):

Mortgage/property taxes/house insurance: 2100

Kid's college funds : 600

Charitable : 650

Groceries/eating out : 600

Daughter's car payment/insurance/gas : 450

Misc. kid expenses : 400

Phone/internet/TV : 150

Utilities (heat, a/c, water) : 150

Car maintenance/gas/registration/etc. : 200

Vacation/movies/recreation with kids: : 500

(not 500 every month but usually one vacation per year from 3k-5k)

Misc. : 200

The reason I estimated at least half of my expenses are kid-related is that I won't need a 4 bedroom house, my food costs (groceries but even more eating out cost) when they aren't with me are a tiny fraction of what they are when they are here, all the school and activity related expenses, college funds, etc.

Flagpole - I thought utilities were pretty safe, you don't agree? I had hoped to leave each of my girls some and tell them that I wanted them to not sell it, but use the dividends as an extra source of income when they needed it. I grew up in a very poor home where parents always struggling to make ends meet ... and something about have a steady source of back-up income is very appealing to me (even if it's just $300/month for each of them).