It's always embarrassing to admit that you're a part of a cult, but I'm a huge fan of MMM and his spiritual godfather Jacob (earlyretirementextreme.com) and I'm currently on track to retire in 4 years in my early forties.
Few points to remember as you browse the site:
1. Retiring early means that your post-retirement life could very well be 50 years long. Over that timeframe, 5-7% return on investments is a reasonable assumption.
2. Living on your investment income also means drawing down your principal eventually. The "goal" is to draw the last dollar from your retirement account on the day that you die (nobody actually believes that, what with passing money to your heirs, your presumably unknown date of death, and at least a small trickle of social security continuing, but that's the theory.)
3. Some of the lifestyle changes seem drastic, but you have to remember one thing: you are no longer working. Having complete freedom to do what you want each day is the whole point of retiring early.
There are very few really reasonable assumptions over a 50 year timeframe. 5-7% ROI is not one of them, I'd say. On the other hand, you missed an important point:
4. "No longer working" isn't a permanent all-or-nothing decision. You can start working again if it becomes necessary for some reason (probably won't earn quite as much though). Or even keep working, just with fewer hours and/or a job that pays less but which you enjoy more.
That's true, it's the flexibility to work exactly as much as you want--even if it's zero hours a year.
In my own financial calculations, I also assume that I start collecting social security benefits when I turn 67. A lot of people consider that naive ("SS is going bankrupt!"), but I don't. So that'll be either a raise for my retirement income or at least a cushion to soften the losses I may have taken in the market in the preceding 25 years.
I'm a big fan of MMM, but I'm also not from the US. From an external point of view, making any assumptions about United States pensions far in the future seems like a bad idea. The United States can barely pay interest on its foreign debt (debt ceiling/fiscal cliff debate), how do you expect it will be able to honor its national debt obligations without resorting to inflation?
As you probably know, discussions about Social Security in the U.S. quickly become holy wars so I'll just answer your question without explanation: I trust the Democrats will protect and defend Social Security from the Republicans who want to destroy it.
There's something to "live like no one else so later you can live like no one else" though. This is pretty much "live like no one else for the rest of your life". I mean..wouldn't you rather work a little longer so you can increase your lifestyle in retirement?
Few points to remember as you browse the site:
1. Retiring early means that your post-retirement life could very well be 50 years long. Over that timeframe, 5-7% return on investments is a reasonable assumption.
2. Living on your investment income also means drawing down your principal eventually. The "goal" is to draw the last dollar from your retirement account on the day that you die (nobody actually believes that, what with passing money to your heirs, your presumably unknown date of death, and at least a small trickle of social security continuing, but that's the theory.)
3. Some of the lifestyle changes seem drastic, but you have to remember one thing: you are no longer working. Having complete freedom to do what you want each day is the whole point of retiring early.