@firefighter – You need to find a way to get your money out of the retirement account without penalty when you’re younger than 59.5 in the US. At the UPS range (where I’m currently at), I fully maximize my 401k and IRA and put the rest in taxable accounts. I’m no longer working towards FI though; just keeping money out of the government’s hands 😀 It is clear that there is no one size fits all. So maybe 500 hours learning about investing and 500 hours spent reading the exciting IRS publication 590. It may even be that speculating on taking the penalty might be a good idea. I have not looked into it.

Actually you can withdraw money from IRAs if you retire early; Google “72(t) distribution”.

There are a few catches, one is that you have to withdraw a reasonably steady stream for at least 5 years. That rule is to prevent you from pretending to retire in order to circumvent the penalty. The IRS definition of “reasonably steady” is overly complex, but I think the tax benefits are worth the elbow grease it takes to figure that out.

Quick calculation suggests that even a trivial 2% inflation rate means you’ll need to have $6500 for expenses after 5 years, which increases the savings goal by nearly 10%.

“You also need to be free of…personal obligations such as taking care of someone who is not working.”

Jacob-
I follow your blog with interest almost since you started it. I must say that this attitude bothers me. I understand that you do not plan to have kids. That’s your choice, of course, but you somehow skip it and focus on things like transportation and food. This choice is a lot more fundamental, in my eyes.

Also, it’s fine to have separate finance in a marriage, but how can one partner declare her or himself independent and free while the other’s future is not yet secure?

I have been the breadwinner of our family for most of my adult years. If I only considered my own expenses, I would be retired long ago.

I am saving aggressively towards a modestly early retirement – hopefully well before 50. But my minimum plan is to provide for the kids until after college and for my husband for the whole of his life, as long as I decide when to pull the plug.

@Carlos – Currently 85% stocks, 10% cash, and 5% bonds (admittedly in an ETF). Scottrade offers new issues at 100 with no commission. These run to maturity. Hence tax calculations become very easy. Investments are 5000+N*1000, N=0,1,….

@Mintycake & Larissa
It’s perfectly ok to want to travel or have kids. We all have our own priorities and that’s a good thing. 🙂
You just have to take the associated expenses into account in your calculations. And they will delay your retirement, so there may not be an “extreme early retirement” in your future. (which is what this wonderful blog is about after all)

@Ram – I own EHI. There is a management fee (like with all ETFs). Transaction fees depend on your broker.

My accountant and I did a little verbal ‘budgeting’: he said that we should draw-down $150k (after tax) a year from our nest-egg. I laughed:

$50k p.a. private school fees
$35k p.a. property tax (US property)
$50k p.a. overseas trips

… then, we still have to maintain our Aus house and LIVE.

$30k a year is a little out of range 🙂

But, then again our version of your table took us from $30k in debt to $7 Mill. in the bank in just 7 years.

The critical part of your post is not the numbers, but that you can create a passive income stream that covers your expenses, after inflation and taxes … AJC.

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