Retirement; like your parents, but way cooler
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.
Do You Need
Two Million Dollars to Retire?
Billy and Akaisha Kaderli
Billly and Akaisha on the Pacific
Coast of Mexico
We like to keep informed about the
retirement from the perspective
of money managers and
those in the
You might have read some of these articles also, you know, the ones that say
saved enough to retire.
Many of these pieces proclaim that you must save enough in your investments
to throw off 80% of your current annual salary so that you can afford a
comfortable life away from a job. Lots of them will say that you need
$2 million in
investments (or more) and woe to the person who thinks they can do it on
Approximately 10% of the households in the US have a net worth of one
million dollars or more. What are the other 90% supposed to do? Not retire?
What kind of common sense does this make? Expecting the
meet this $2 million dollar mark is not realistic.
As you know, we have
three decades of financial independence behind
us. And while everyone’s idea of a perfect lifestyle sans paycheck is
different, we can tell you that for these
30-years, we have kept our
around $30,000 or less per year.
The secret: Living
within your means
of our years of retirement and travel we cannot recall one retiree who
regrets their decision to retire. In fact, most have told us that they wished they had done it
The Society of Actuaries
(SOA) recently conducted 62 in-depth interviews of retired individuals
across both the U.S. and Canada. These people were not wealthy and had done
little to no financial planning. But the vast majority of them shared that
they had adapted to their situation and live within their means.
they have adjusted their spending to the amount of money they have
coming in every month.
So basically, it's really
that simple and this is why we say if you want to know about retirement,
Go to the
It doesn’t have to be complicated
In our books and in our articles about finance, we say over and over that
there are four categories of highest spending in any household. We
personally have made adjustments in all four of these categories, and have
therefore reaped the benefits of having done so. We discuss these four
categories in more depth below.
financial guys and gals will have you tap dance all over the place with
investment products, and a certain financial goal you must achieve. They
will press upon you the seriousness of the decision to leave your job for a
couple of decades of jobless living. We say it doesn’t really have to be
that complicated, but it's very important to pay attention to these four
Housing is THE most expensive category for you to manage.
just the house itself, it’s the maintenance, the property taxes,
the insurance, and any updating you might want to do to a place where you
are going to be living for years down the road.
If you want to rebuild that boat dock to the lake where your boat is parked
during the summer, that takes money. If you are tired of the style of
faucets, sinks, tile and tub areas of your bathroom and want to upgrade,
that is a large expense. Now that you are retired and want a more modern
kitchen, more counter space, better lighting, prettier cabinet covers – Ka-Ching!
You are hearing the cash register tallying up the cost.
If you have a hot tub, an extensive garden, or if you want to build a deck
to connect the house to the garden, or put in a Koi pond… Well, you get the
I understand that for some people, their home is their castle, and those
homes are gorgeous and a comfortable place to stay. All we are suggesting is
that homes will never say no to having money poured into them.
If you want to
travel or to snow bird part time, then you will find yourself
paying twice for housing – the one you have left in your first location, and
the hotel or the vacation home in which you will spend part of the year.
If you are not vigilant, this one category will suck the life out of your
retirement. We just want you to know that you have a choice.
retirement is not a bad thing.
Relocating to a state
with less taxation is a smart move. You could move to an
Adult Community where you could choose to own the land or lease it. Here
a variety of
social activities are offered and the maintenance of your front yard is taken care of in
your lifestyle fees.
When you travel, you could
to house sit. Or take advantage of better
pricing for apartments or hotels that rent for the month and include
utilities, WiFi, and a maid. You could try AirBnB for less than a hotel room, and
live like a local instead of a tourist.
Do you know how much your home (including the taxes, insurance and
utilities) costs you per day? It is a figure that might startle you.
Transportation is the second highest category of expense.
Now we realize that especially in the States, it is a bit more challenging
to wrap your mind around the idea of not owning a car, or just having one
for your household instead of three.
According to the latest
AAA's report on car ownership in 2019, the average finance cost of a
new-car payment is $819 per year. This is only the interest on the loan, not the car payment
itself. The average driving/maintenance cost is 9 cents per mile. If you drive 15,000 miles a year you need to add
$1,350. All total AAA estimates the yearly costs for new car ownership are
So then, in the
category of transportation, if you decide you want to fly to
an island for a vacation, you must add in the cost of the flight… and any
boat trips you might take, and any taxis from the airport to your hotel, and
the price of a
car rental for the week or two that you will be vacationing.
It all adds up and it's all a part of this category.
In your daily life, you might consider
becoming car free as an option,
paring down to one vehicle, or riding a bicycle, walking, using public
transport as often as you can, using a golf cart, a motorcycle, utilizing Uber, or paying a friend to take you
somewhere like your weekly grocery visit. These options are far cheaper than
the amounts you see listed above.
Ah yes. Taxes can be sneaky things. It’s not just your income tax, it’s the
tax you pay on your phone bill, on your gasoline, the soda, alcohol or
tobacco you use, the hotels you might vacation in, the local city tax or
your state tax rate.
You can arrange your portfolio so that your monthly income is taxed at the
capital gains rate which is less than the income tax rate. You could
consider giving up soda, alcohol, tobacco or any of the other items that are
taxed separately. Or you could move to a state that taxes you less.
a good area to examine in your annual expenses. It could be a large
leak in the control of your finances that you are not aware of.
Food, Dining and Entertainment.
What’s exciting about this category, are all the choices you have to make it
work for you in your retirement lifestyle.
your expenses, the amount you pay in this section of your
annual spending will become clear to you. Are you counting that twice weekly
latte at Starbucks? How many times a week do you eat out? What do you do to
entertain yourself? Sail? Play golf? Take several vacations a year in expensive
locations which include high priced hotels, fine dining, an upgraded wardrobe, and
We are not saying you can’t have fun or enjoy that macchiato or vintage
wine. We are simply espousing awareness. If you knew what you were laying
out for this area of your budget, does it make the happiness-to-money-ratio
Summing it up
collect experiences not things.
We have a great life, and it’s understandable that our style is not for
everyone. It is our reasoning that if you focused on these above areas of
great spending and modified them – even just a little – you could find
“extra money” for your own particular retirement lifestyle.
your spending, all of this becomes crystal clear to you -
Where your money goes and why.
When you grab control of your finances, it brings about a confidence and
security that is
What's Your Number? - How much money do you need to 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.
Retire Early Lifestyle Blog
About Billy & Akaisha