Quit and Retire Three Years Earlier!

 


Visitors: 504

For most people, there is a direct correlation between how worried they are about retirement income, and how much they can actually do about it. This is because the more worried you are, the closer you probably are to retirement, and the less time you have to do anything – like save up. Effective ‘saving up’ requires time. Time so your money can grow. Save an extra $200 a month, three years before retirement (at age 62), and you’ll amass a grand total of $7,887 (averaging 6% growth). Not likely to have a big impact on your retirement lifestyle.

But what if you invested for retirement when you were NOT worried about it? What if you, say, quit smoking a pack a day at age 45 and took the money and invested that instead? (For the purposes of this illustration, let’s assume a pack costs $7.00 and you smoke a pack a day so you invest, for easy figure’s sake, $200 per month. Again, average compound rate of return is 6%. )

Instead of starting to save when you start worrying about retirement (at age 62), and amassing that grand total of $7,887 by age 65, you start saving when you’re NOT worried about retirement (at age 45 – by quitting smoking and saving that money) so you end up with, wait for it, - $91,129 !

What will $91,129 do for you at age 65? It would provide you with $456 in additional monthly income for the rest of your life (continuing to average 6% growth), and you won’t have to touch your capital. Or, perhaps, you could choose to retire earlier!

Don’t start to worry, at age 62, and save a paltry $7,887 by 65. Instead, start saving $200 more a month at age 45, when you’re not worried, and have $69,892 by age 62! Then you could retire completely at age 62, by using both the principle and interest as income from 62 to 65. $69,892 would provide you with $2,100 in income for three years! Thus, quit smoking and quit working 3 years earlier!

Of course, most of us ‘act’ when we have the ‘urge’ to act. (Note how the words ‘urge’ and ‘urgent’ have the same root. ). You will tend to act on your retirement plan when it is most urgent. But long term goals are, by their very nature, NEVER URGENT! Now, perhaps THAT is something to worry about.

About The Author

Rick Hoogendoorn is a financial security advisor with Cheri Crause & Associates Inc. (He quit smoking ten years ago this month. ) Cheri Crause is a certified financial planner in Victoria, BC.

www.chericrause.com

rick.hoogendoorn@shaw.ca

(451)

Article Source:


 
Rate this Article: 
 
Buying An Electronic Cigarette Kit Helps A Smoker Quit After 20 Years
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

How To Retire 3-5 Years In MLM

by: Daniel Cassidy (January 03, 2008) 
(Home Based Business)

5 Important Questions to Answer Years Before You Retire

by: Eric Bayne (December 16, 2008) 
(Investing/Retirement Planning)

A Simple Plan to Start a Financially Successful Business and Semi-Retire in 5 ..

by: Mike Makler (August 27, 2005) 
(Home Based Business)

95 Percent of You Will Quit Grappling in 4 Years!

by: Paul Greenhill (June 15, 2007) 
(Recreation and Sports)

How To Quit Smoking For Your New Years Resolution

by: Trevor John (December 08, 2007) 
(Health and Fitness/Quit Smoking)

New Years Resolutions - Why People Quit

by: Susan Velez (January 04, 2008) 
(Self Improvement/Goal Setting)

How to Quit Smoking - One Former Smoker's Story Eight Years Later

by: Joe White (July 02, 2008) 
(Health and Fitness/Quit Smoking)

Confessions of a Closet Smoker - How I Quit Smoking After 42 Years

by: Carma Dutra (August 11, 2008) 
(Health and Fitness/Quit Smoking)

How My Husband Quit Smoking After 40 Years and How I'm Coping With the Quitting .

by: Lori Wilk (May 19, 2007) 
(Health and Fitness)

Buying An Electronic Cigarette Kit Helps A Smoker Quit After 20 Years

by: Donald Crabtree (May 11, 2011) 
(Health and Fitness/Quit Smoking)