Just starting out, keeping it simple...

[Sniper]

mk,

First, if you are looking to retire early, it is important that you build a substantial port, in addition to your retirement account that will carry you from early retirement to normal retirement age. So if you wanted to stop working at 35, you should run some numbers on how much you will need by then, to actually accomplish that.

[maxtower]

First off, you need a Roth IRA.

Sniper is right, the 401k money will not be easily accessible at 35, so you'll need some extra savings to cover the difference while you are 35-59.5.

Unless your side income is very good, it will be difficult to retire at 35 in this country. If you are able to pay off your house by then, you'll need a minimum $1500/mon in today's dollars for living expenses after taxes for an extremely modest, no wife no kids lifestyle. To make that kind of money purely from investments (like 4% dividends) you'll need $600,000 saved up outside of your 401k.

If you need to access your 401k money before age 59.5, you should look up the rule of 72T.

[jively]

[ QUOTE ]
First off, you need a Roth IRA.

Sniper is right, the 401k money will not be easily accessible at 35, so you'll need some extra savings to cover the difference while you are 35-59.5.

Unless your side income is very good, it will be difficult to retire at 35 in this country. If you are able to pay off your house by then, you'll need a minimum $1500/mon in today's dollars for living expenses after taxes for an extremely modest, no wife no kids lifestyle. To make that kind of money purely from investments (like 4% dividends) you'll need $600,000 saved up outside of your 401k.

If you need to access your 401k money before age 59.5, you should look up the rule of 72T.

[/ QUOTE ]
All of the money from the Roth is not available at 35, only the original contributions. The 72(t) rules are pretty complex, and inflexible, and I do not recommend trying to take substantially equal payments over 24.5 years. If you mess up, you end up paying a 10% tax penalty on all of the distributions.

A 17% savings rate is pretty good but probably not nearly enough to be able to retire at 35. If you retire at 35, your life expectancy is about 58 years to age 83. That is, about 50% of 35-year-old men live to be 83. Note: 50% live longer than that. So you are talking about a very long retirement. You won't get social security until 62, and then it won't be that much. So, you will need substantial savings for retirement.

For such a long retirement, 60+ years, you should not consider more than a 3.5% initial withdrawal rate. So, it you wanted to spend $35,000 per year, you'd need $1 million in investments. Each year you could safely increase your withdrawals for inflation. However, 3.5% is not very much - you need about 28.5x your first years spending in investments.

Are you in a position to have that much in investments by the time you are 35?

-Tom