Retire Early Lifestyle
Retirement; like your parents, but way cooler


Retire Early Lifestyle Blog 

Free Newsletter Subscribe/Contact

Advertise on info here

RetireEarlyLifestyle Logo RetireEarlyLifestyle inspirational photo

In 1991 Billy and Akaisha Kaderli retired at the age of 38. Now, into their 4th decade of this financially independent lifestyle, they invite you to take advantage of their wisdom and experience.

How to Create a Pension for the Average Joe

He's 65 years old and has as little as $200K Savings

Billy and Akaisha Kaderli

Chart, Average Retirement Savings by Age

Chart of average retirement savings by age

I know many of our readers are not “average.” However, if average Joe can support his retirement on as little as $200,000 savings, imagine what you can do with the amount you have!

By reading the chart below, you can see that the average spending for retirement households age 65 - 74 is $48,000.

Chart, Average annual household spending by age group

It is tough to make that $48k amount with only Joe’s savings, so what should he do?

Visit our Book Store

Social Security

The average recipient today collects $1,542 a month, or $18,504 a year. Joe’s SS check is average and he has a wife who also collects the average Social Security amount.

$18,504 times 2(people) = $37,000 per year.

Not quite the $48,000 that they need, but getting closer.

Hopefully Joe has his retirement money invested in VTI (Vanguard Total Stock Market ) or SPY ( S&P 500 Index ) and is making market gains equaling around 10% annually.

Year   10% Return
withdrawing $12,000 per year




DQYDJ S&P Return Calculator 1957 to 2022

Here you can see that since 1957 - about when Joe was born - the S&P 500 has had an annualized return of over 10%, dividends reinvested, but let’s use 10% as a more conservative projection.

Remember, Joe has to make up $11,000 to match his average spending ($48,000). But let’s give Joe an extra one thousand dollars per year so that he can pamper Mrs. Joe with occasional gifts and dinners out.

So, he needs $12,000 out of the $200,000 in savings per year to make up the difference in spending. That's an extra $1000 per month.

Invested in the S&P 500 - based on 65 years of returns and using 10% as the annual return - after his first year he would have $220,000 minus $12,000 withdrawal = $208,000.

Now Joe has $49,000 in annual income: $37,000 from Social Security and $12,000 from investments.

Plus his $200,000 has grown to $208,000, a 4% gain outpacing inflation at the current rate of less than 2% per year.

Their Social Security payment is also indexed to inflation so as inflation rises, so will their Social Security.

If Joe and his wife live to be 90 years old, after twenty-five years of this illustration (see above left chart), his savings will have grown to $986,776 and perhaps he could treat Mrs. Joe to a European cruise.

But what if the markets turn south and Joe's investment starts declining? Certainly he cannot continue to pull out a $1000 per month to maintain his lifestyle.





Adaptability is the key and - as in life - investing has no guarantees. He might consider withdrawing less and reduce his spending or he and Mrs. Joe could pick up a side gig or any number of other options.

Being flexible in their retirement is certainly a net positive. On the other hand, what if the markets over this time span outperform the norms? His spending could increase and they could go on that cruise sooner.

No one can predict the future. It's to our advantage to develop confidence in our ability to adapt to what Life throws our way.

Run your own numbers. You just might find you are closer to Financial Freedom than you think.

For more articles on Retirement Issues, Click Here

Visit our book Store

About the Authors

Billy and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance, medical tourism and world travel. With the wealth of information they share on their award winning website, they have been helping people achieve their own retirement dreams since 1991. They wrote the popular books, The Adventurer’s Guide to Early Retirement and Your Retirement Dream IS Possible available on their website bookstore or on

Trending on Retire Early Lifestyle


contact Billy and Akaisha at

advertise contact

Your financial independence and travel starts here

Retire Early Lifestyle appeals to a different kind of person – the person who prizes their independence, values their time, and who doesn’t want to mindlessly follow the crowd.

HOME   Book Store


Retire Early Lifestyle Blog      About Billy & Akaisha Kaderli      Press     Contact     20 Questions     Preferred Links    

Retirement     Country Info     Retiree Interviews      Commentary     REL Videos




Subscribe Newsletter