What if you could retire early by living a nomadic lifestyle?
Can you retire early by becoming a “digital nomad”? Possibly. But, I’m not a financial planner and I am no expert. However, consider this. If you could reduce your expenses by half or more now, how might that change your retirement picture? Here’s a simple way to think about the calculations from Forbes, though you should always talk to your financial adviser, of course.Updated May 9, 2018
- Start by determining how much money you have in savings and retirement accounts.
- Assume you can withdraw roughly 4% a year without outliving your money (according to experts). So, if you have $500,000 in savings, for example, that means you could withdraw roughly $20,000 per year as income.
- Now add how much you expect from Social Security / CPP/ Old Age Security or other pension funds to determine your total income.
- Now figure what you expect your expenses to be. Most experts say you’ll need 75% to 85% of what you’re making now to maintain the same standard of living, but adjust that up or down depending on whether you’ll have a mortgage, debt, etc.
- Figure out the difference between your income and expenses. If you’re like most, your expenses are larger than your income.
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