Our friends at the Social Security Administration (SSA) haven't done us any favors lately. Not only do we live in fear that they'll run out of money before we're done, but they've also gone and raised the age of retirement, too!
If you were born in 1960 or later, the official retirement age is now 67, not 65. Sheesh. But while you can't draw down Social Security benefits until you reach that magic birthday, there's no reason you have to be a wage slave all your life.
Billy and Akaisha Kaderli retired 18 years ago -- when they were only 38. With some planning and disciplined action, you may be able to do the same.
How they did it
Their secrets are simple: they planned ahead and worked hard.
The Kaderlis didn't strike it rich, inherit big money, or win the lottery -- and they launched their retirement with considerably less than a million dollars.
Their seed money came from living below their means, saving money, and investing in the stock market. When they retired, they sold their home, their cars, and their excess possessions, and set off with about $500,000, most of it invested in low-cost, broad-market index funds, to enjoy their retirement.
They spend, on average, $24,000 a year. Are they living in a shack by the river, eating squirrels they catch by hand? Not at all. They own a home in an active-adult community in Arizona, and they travel the world, often staying places for months or years at a time. They eat well, but they don't accumulate many belongings. They travel to locations that are vibrant and interesting but relatively inexpensive.
How you can do it
By following the Kaderlis' example -- plan, invest, and control your spending -- you, too, could retire long before the SSA expects.
If you want a secure retirement at any age, it's important to crunch the numbers. Figure out how you want to spend your time during retirement -- then figure out how much it will cost. Don't forget necessaries like health care. A retirement calculator can help you extrapolate from these numbers to a concrete goal. Once you have a goal, create a plan for how you'll save and invest your money to get there.
Like the Kaderlis, you can park your money in a simple broad-market index fund, such as the Vanguard 500 Index Fund. It will instantly make you a part-owner of companies such as Procter & Gamble (NYSE: PG), IBM (NYSE: IBM), EMC (NYSE: EMC), McDonald's (NYSE: MCD), and Sprint Nextel (NYSE: S).
You can also give your portfolio a good shot at outperforming the S&P 500 by adding some top-notch individual stocks or outstanding managed mutual funds to your mix. Best Buy (NYSE: BBY), for example, has averaged 20% annual returns over the past decade, while Intuit (Nasdaq: INTU) has averaged 13%.
Finally, control your spending. Focus on inexpensive pastimes such as walking, biking, board and card games, reading, writing, fishing, and gardening. Think about which material possessions are as important or useful to you as those years you plan to spend living the life you've imagined. The more you save now, the sooner you can make that fantasy a reality.
Work-arounds
If your calculations just don't support early retirement, no matter how many lattes you forgo, all is not lost.
You could still take an early retirement from your current full-time job in order to work part-time -- giving you more time for pursuits you enjoy and more time to continue to save money. Many people work well into their retirement years, even if they can afford not to, simply because they enjoy it.
And for more ideas, including profiles of other people who successfully retired early and are willing to share their strategies, take a look at Motley Fool Rule Your Retirement. In the spirit of controlling that spending, you can even take the next 30 days to look around free of charge and get a jump-start on your plan.
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Longtime Fool contributor Selena Maranjian owns shares of McDonald's and loves Procter & Gamble's Pert "Fresh" shampoo. Sprint Nextel and Best Buy are Inside Value recommendations. Best Buy is a Stock Advisor recommendation, and The Motley Fool owns shares of Best Buy. The Fool has a disclosure policy that will never retire.
