I plan to semi-retire in 4-years. I think most Americans live far too complex lives and we can all get by on much less than you think.

I can work two nights a week and still make $30,000 a year after taxes. I can live on $14,000 a year.

We all need to simpilfy our lives.
$100,000 in cash
50,000 saved for things like a new roof-A/C for house, sewer pipe, wiring problems, etc.

So on $150,000 in cash making 4% in CD’s is $6,000 a year pre tax.
Go simple, drive a cheaper car, I have a 2003 Lincoln Town Car with over 240,000-miles. I got it 2-years ago for $4500 cash.

My house was a HUD foerclosure. I got it for $56,000. It is in a good area of a safe town and is all brick on slab. 1,200 sqft. Simple, cheap on insurance, utilities, property taxes and no POA dues.

I see many people who are living too “high on the Hog”. 3,200 sq-ft home, new $45,000 SUV’s every 2-years(not a tax write off- they are actually paying for the vehicles). Spending money like it grown on trees.

Go small, go simple, go smart. My time is worth more to me than the money.

The bigges thing for me would be health insurance, but I work in a job that I can still get great health insurance if I work only 2-nights a week.

Just sell down and go smaller. Drive an older car, but have money for repairs if needed.
Live life, take 1-month vacations in the summers, work only 2-nights a week, have the peace of mind of no debt, money in the bank, and great health insurace.

I’ll have to see if you have a blog. Your writing style is easyto follow and helpful info.

Debtors anonymous needs you!

Its nice to hear a good story, I hate reading those depressing stories of seniors who will die with debt. Its actually their stories that made me get out of debt and start saving, but its also nice to hear the good side of those who did things right.

Good for you. I wish the writer well.

For a while, my son was interested in going to McGill. I fantasized about his marrying a Canadian and getting that great healthcare!

Jacob from Early Retirement Extreme has had some posts on how he deals with health care in the US:
http://earlyretirementextreme.com/my-hdhp-hsa-and-some-comments-on-health-care.html

I’d probably do what he does with the catastrophic insurance, since my family has been fortunate / healthy enough that we very rarely need medical care. It seems to me that it could be possible that taking more time off when you’re younger and able to lead a lower stress, healthier lifestyle and therefore actually avoid sickness would be smarter than waiting until you’ve worked yourself to death – no?

Trina #41 – Re college, my oldest and I had a deal that I would pay tuition and books (~$3k/semester) and he would take care of his living expenses.

Tony #43 – with the magic of compounding it would be more like 2 1/2 times, not just doubled. With respect to inflation, for interest sake, I checked my total expenses from 1995-6, and I actually spent less than I did last year (not including taxes of course, unless it’s my very own stupid tax).

Do you equate ten years of inflation at 10% to mean things will pretty much double in price at the end of that time?

One question: what are you doing about your children’s college expenses? Is it up to them to cover college, do you already have enough saved up, or are things different in Canada?

Thanks again for the great post!

Everyday Tips (#21) – Oh my kids have taught me more about how to live and who I want to be than I think I will ever teach them. Re. the house, our prices have stayed pretty steady where I live but I’ve mentally low-balled the value to myself because I want to be pleasantly surprised when I sell. (I really am quite pessimistic and conservative).

No Trust Fund (#25) – the investments are mostly in dividend or index type mutual funds. A few stocks of companies that I have had experience with.
The biggest surprise? That I would miss work as much as I did early this year. And that slow travel with no itinerary is the best kind.

Deas (#36) Thanks so much. I know what you’re saying, one of my sisters died at 39. Life can be way too short. I’d like to enjoy my kids and life while we’re all young. Pessimists (aka realists) don’t bother me, I tend towards that way of thinking myself. I think everyone that isn’t retired yet but wants to benefit from the social security they’ve paid into is very worried about their own situation (I’m worried too) – and the health care situation doesn’t help.

Canada does not have that issue due to socialized health care system (same in UK).

Most people above have not addressed this point, hence mentioning it here.

Jacq, you are brave to do it. Congratulations, and for sure build in contingencies, have a short term, medium term and long term lucid plan of action, and then conduct this going forward (esp. after kids leave for college or for their own lives).

Kenny

PS. But live within your means and try to give back when you can. Enjoy your choice!!

@ AR (#29) – I believe that the greatest hedge against inflation is an individual’s creativity, willingness and ability to reduce their personal costs. Having stock in oil and gas companies probably helps too. I haven’t experienced the inflation that you mention to that extent personally except for those areas where I *chose* to inflate consciously. While there’s many areas that have gone up, many have also gone down. In inflation-adjusted dollars, my previous vehicle (bought in 1993 for $15k) was cheaper than the last vehicle (bought in 2007 for $18k). My first home computer (1995) cost more than my second (2004) and both cost more than my latest (2010). I’m not saying that inflation doesn’t exist, but surely my expenses will go down, not up (or even just stay stable) as the kids get older and more independent, and you definitely have more time to DIY things than you do when you’re working 70 hours a week as I have at times in the past.

Landon (#31) – I don’t know exactly how your system works, my guess is that they’ll raise the age limits first and maybe lower the benefits. It’s not a good time to be on the tail end of the boomers.

Amanda (#32) – how awesome for you! No, my oldest son and I share my vehicle so I do have a car. I did some volunteering earlier this year too. I’d really love to do something like help out with building a Habitat for Humanity house. I’m going to look into that when I’m off this spring. I’d also like to check into volunteering with an organization like Debtors Anonymous since I’ve BTDT and got out. This last year, I focused on playing and puttering though – cross country skiing, hiking and biking with the kids and dog, playing piano, knitting, very slow, leisurely travel…
I’d like the house to be newer in a way since I’m kind of burnt out on remodeling (this is the 3rd time). I wouldn’t rule out buying another just cosmetic fixer-upper again though. I have friends that retired (Semi-retired? What do I call it?) early and they did it off of fixing up houses in the summer, flipping them and taking off in their RV in the winters. One of my favorite blog buddies retired early in her mid-30′s from renovating houses.
I used to do monthly income and expenses on my blog in the early days but people seemed to think it was boring so I stopped. Prior to that, for a long time I lived on one paycheck and saved and invested the other one and anything extra like bonuses, just using it for one trip a year, annual insurance, stuff like that. It was an easy method for me to be lazy and save quite a bit without analyzing the minutiae. Having variable income has kind of thrown me for a loop and I’m trying to build the right system – which will probably be just giving myself a monthly allowance.

Is the town home you’re going to purchase going to be newer to prevent you from spending part of your nest egg on future remodeling expenses?

Sounds like you have no car–correct? What do you do now?

I’d like to know what your expenses are made of!

Look at how that 4.5 percent is calculated, and then look back at what you spent five years ago and in the last year. See if you agree that 4.5 percent is a reasonable assumption for a retired individual consumer after making the comparison. I don’t. The things we need – food, fuel, health care, and rent (or your house payment with taxes and insurance included) are all going up at a rate that’s significantly higher than the government-calculated overall 4.5 percent.

@ Rita (#7) – I like your ideas too, and wish you all the best in your side-income gigs!

@ Janette (#11) – I don’t know about most women, but for this particular one, it’s probably harder because I tend to be somewhat pessimistic and worry too much. I have fears of being a bag lady too-OTOH, like my dad says (he grew up in the Great Depression), some people who had capital made most of their money then.

@ Alison (#12) – oh, I do like working, but not from home. I like the camaraderie of offices and working as a team. Different strokes, it’s all good!

@ Kestra (#13) – I totally agree on the child-rearing philosophy. That’s what my youngest son asks for – my time. And to go camping.

@ Dreamchaser (#15) – I can’t recommend YMoYL highly enough. I didn’t “use” the 9 step program religiously the whole time, really just the first 6 months, then I just got things on autopilot.

@ Tyler (#22) – The dictionary definition of semi-retired is reduced work because of age or ill health. We’re seeing a lot of people today who are also working less by choice. I guess I consider it semi-retired if I’m working about 25% of what the average person does in a given year. Right now it’s 30 hours a week, I didn’t work at all for about 5 months this year and likely won’t work for more than 4-500 hours next year. How is that different from your wife or your uncle? I don’t know, I sometimes have issues with semantics too.

AR (#24) – you’re suggesting that I factor in 10% inflation rather than ~3% ? Since it’s averaged 4.4% in the last 45 years, that’s about as high as I’d be willing to calculate it at. I think there’s enough fat in my budget if need be (trust me, I can “do” frugal). And why go back full time when I could just work 50% more and still take loads of time off every year?

I am currently reading Your Money or Your Life and have found it very inspirational. It is great to read about someone who has actually put the book into action and made some big life changes as a result. Thank you for sharing!

On the river cruise, we met a 70-something fellow named Parl, who used to be a factory worker (or something like that). He told us that when he retired, he didn’t stop working. Instead, he became a limousine driver. He loves the job, but he admitted that his retirement is different than the popular perception. I wrote down this quote from him:

“I never retired; I just work for less money now!”

I thought that was hilarious. But from the “retirees” I know, most of them are like this, even those who don’t need to work. You know the millionaire who lives across the street from me? He spends four months of every year in New Zealand — working. (And he does it for room and board, not actual pay.)

Work is more than just a way to make money. For many folks, it provides a sense of purpose.

To me, semi-retirement (at least when coupled with Financial Independence) means that you’re working out of choice, not because you have to, just as Jacq describes.