Undated -- Most Americans go back to work after Memorial Day. But how long will it be until every day is a vacation day? We're talking retirement.
We hope you love what you do, but let's face it - no one wants to work forever. So what can you do now to plan for retirement?
Krantz said, "We're looking at a phenomenon called extreme early retirees. The goal of these people is to retire before they hit the big 4-0. [...] To make this happen though it takes 2 key aspects. First, you need to try to save at least 25 times what you need to spend in a given year. So that means you're gonna have to make some pretty tough decisions on where you're spending money, prioritizing, and also figuring out how to save more. And if you can do that, it's actually doable. And then the next objective is, once you hit that savings goal, your objective is to never take out more than 4% of your portfolio every year. And in theory on paper, it works out."
Krantz said the techniques extreme early retirees use can be valuable to people of all ages. They cut down on unnecessary costs, like housing and transportation, to have the flexibility to retire earlier if you choose to do so.
If you're already over 40, Krantz said the keys are investing and saving right. "It sounds so easy, and it is, you just have to identify where you're wasting your money. Is it restaurants you do need to eat at? Is it housing thats too much for you? Is it transportation thats too much? And cut those unneeded expenses back so that you can put more in savings and invest it until you have the money there so that if you want to retire early you can."
Krantz also pointed out some caveats he said were worth mentioning. "First of all healthcare, when someone gets ill or seriously sick that could be a major problem. The other thing too is, many people today do not have pensions. That is a predictable earning stream that is very helpful when you're retired and you're no longer relying on your working capital or your income from your job."
2 Wants to Know Skyped with USA Today reporter Matt Krantz. He's written an article called, "What Should I Do Now To Retire At 40?" But we asked him for retirement planning tips for every age.
You can read Matt's advice every week in USA Today.
WFMY News 2/USA Today