Early Retirees Say You, Too, Can Quit Working Early

MINNEAPOLIS (WCCO) -- For some, retiring early sounds like a fantasy, especially when recent studies suggest many people don't think they'll ever be able stop working.

However, some Minnesotans who left the workplace long before the age of 65 told us it's possible if you stick to a plan.

His life doesn't look all that different than most -- a wife, two kids, a suburban home -- but when you see what Bob Shubatt does to track every dollar, there is a definite distinction.

Shubatt retired three years ago at the age of 55. His wife Pat left her work at 51.

"I love every day of it," Shubatt said.

Shubatt hatched his plan when he was in his late 20s.

"You've got to get time on your side," he said. "That's the most important thing."

Shubatt started his career in finance before moving into talent recruiting. He's said he eventually made a six-figure salary but it took him years to climb the corporate ladder.

"When I made more money, I simply invested more money," he said.

He and his wife maximized their companies' 401K plans, never had credit card debt, and paid cash for their cars. They shopped sales and took advantage of credit card rewards programs.

The Shubatt's agreed to live below their means to pay off their mortgage in 12 years. All while their investments delivered an 8 percent rate of return, essentially doubling their money every nine years.

"It really isn't that hard. It's just about discipline and time," Shubatt said.

LPL Financial advisor Nicole Middendorf said most of her clients on track to retire early make between $60,000 to $100,000 a year, and are used to following a budget. She believes higher income brackets often struggle, as they chase a high-dollar lifestyle.

"If you really want to retire early, you can do it. It's not that difficult," Middendorf said. "It doesn't matter how much you make. It completely matters how much you spend."

She tells people they'll need at least 25 times their annual budget by retirement, and if clients want to walk away early, starting early is crucial.

"If you're waiting until you're 40, it's much more difficult," she said.

In addition to maximizing your company's 401K match, Middendorf recommended a Roth IRA. Both earnings and withdrawals on the account are tax free after 59.

Jim Roberge, 38, makes $100,000 a year and hopes to retire at 55. The owner of a dock installation business, he doesn't think his body can handle working much past that.

He's investing in a Roth and rental properties as part of his plan.

"You want to think about tomorrow and buying this and buying that, but I didn't want to be in my 50s or 60s and not have anything," Roberge said.

Their mortgage is their only debt. They drive used cars and shop at Goodwill. Once their 4-year-old starts kindergarten, the Roberge family will put the $1,100 they spend on child care directly into retirement.

Bob Shubatt presented a math lesson to illustrate the importance of saving. Say a young couple treats themselves to a $4 cup of coffee each day for 40 years.

"If you'd taken that same amount of money that you spent on coffee and you invested it and you got an 8 percent rate of return, you'd have over $837,000 more in your retirement account," he said. "It really just comes down to sacrifice and what kind of sacrifices you're willing to make in the short term for the long term gain."

Financial experts agree you need to be saving more than your standard 10 percent if you want to retire early. Bob Shubatt says he was saving 25 to 30 percent of their household income.

To see how much you need to save to retire early, check out this interactive calculator.