My Retirement Plans Hit a Speed Bump – But I Can Still Retire Early

My Retirement Plans Hit a Speed Bump – But I Can Still Retire Early

My Retirement Plans Just a Few Years Ago
I’m lucky. From an early age, I’ve been saving for my retirement.  Since I was in my early 20’s I saved the maximum 15 percent of my paycheck into my 401k retirement plan, and then to top it off, I bought a home. Those were the glory years before the big Y2K scare before the first stock market crash. Back then, you could throw darts against a wall showing different tech stocks, and you would always come up a winner. I made only one mistake. When I was in my late 30’s, I cashed in one of my old 401k plans to pay off my house. Looking back, I wished I hadn’t done that because I took a big tax penalty. But I still had lots saved. By the time I reached my mid 40’s I had a really nice nest egg in my 401K savings, and my house in Portland was completely paid off. I was off to a great start for an early retirement. I had no house payment, and a I was on track to retire in my mid 50’s – I was thinking 55 or so.

Huge Financial Crisis Changes Everything
Well, a few things happened that changed everything. First – I lost my job in Portland (my IT job got outsourced). It was a huge blow to my ego and also changed my retirement plans. Luckily, I work in the IT field, and I easily found work very quickly up in Washington State a few of months later.  I tried to keep my home in Portland by renting it out, but I ended up with a bad renter that couldn’t pay his rent on time. So I sold my house and bought a more expensive one where I am living now. Now I have a house payment for the next 30 years. For me, having a house payment makes it much harder to retire early. I can no longer retire at the age of 55. Now it looks more like 59 1/2 or 62.

I Can Still Retire Early
The secret to retiring early, is keeping your expenses low. Do you have a big house payment every month? You can still have a house payment and retire early, but only if your payments are low. How about those credit cards? Car payments? My biggest expense is my house payment. I have a plan to help with my house payment. With a little effort, I can turn my home into a source of income. When I was looking at homes, I settled on a big enough home so I could turn it into a duplex. There’s a room upstairs that can easily be turned into a kitchen. My thoughts are to rent the downstairs, so my wife and I will live upstairs. My rental income should make the house payment for us.The reason why I am choosing to retire at 59 1/2 – that’s when I can draw money from my 401k without an early tax penalty.

What Will We Do In Our Early Retirement?
My wife is from Thailand. She was born and raised in that beautiful country. I would retire there full time, except the weather gets incredibly hot for 6 months out of the year starting in April. We won’t let the weather stop us from going there. Our plan, when we retire, is to spend 6 months a year here in the United States, and the other 6 months in Thailand. Thailand is a wonderful place to retire. The culture is amazing, the food is fantastic, and it’s really a cheap place to live.

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Gary is one of the founders of RetireBook, and is the site engineer and also one of its writers. He has been working in IT for over 25 years, is a world traveler, and enjoys everything about living in the Pacific Northwest. He is full of energy, loves the outdoors, climbed several mountains, volunteers in his community, and has been saving his whole life for an early retirement that will be coming up in just a few short years.