Quit and Retire Three Years Earlier!

For most people, there is a direct correlation between how worried they are about retirement income, and how much they can actually do about it. This is because the more worried you are, the closer you probably are to retirement, and the less time you have to do anything - like save up. Effective 'saving up' requires time. Time so your money can grow. Save an extra $200 a month, three years before retirement (at age 62), and you'll amass a grand total of $7,887 (averaging 6% growth). Not likely to have a big impact on your retirement lifestyle.

But what if you invested for retirement when you were NOT worried about it? What if you, say, quit smoking a pack a day at age 45 and took the money and invested that instead? (For the purposes of this illustration, let's assume a pack costs $7.00 and you smoke a pack a day so you invest, for easy figure's sake, $200 per month. Again, average compound rate of return is 6%.)

Instead of starting to save when you start worrying about retirement (at age 62), and amassing that grand total of $7,887 by age 65, you start saving when you're NOT worried about retirement (at age 45 - by quitting smoking and saving that money) so you end up with, wait for it, --- $91,129 !

What will $91,129 do for you at age 65? It would provide you with $456 in additional monthly income for the rest of your life (continuing to average 6% growth), and you won't have to touch your capital. Or, perhaps, you could choose to retire earlier!

Don't start to worry, at age 62, and save a paltry $7,887 by 65. Instead, start saving $200 more a month at age 45, when you're not worried, and have $69,892 by age 62! Then you could retire completely at age 62, by using both the principle and interest as income from 62 to 65. $69,892 would provide you with $2,100 in income for three years! Thus, quit smoking and quit working 3 years earlier!

Of course, most of us 'act' when we have the 'urge' to act. (Note how the words 'urge' and 'urgent' have the same root.). You will tend to act on your retirement plan when it is most urgent. But long term goals are, by their very nature, NEVER URGENT! Now, perhaps THAT is something to worry about.

About The Author

Rick Hoogendoorn is a financial security advisor with Cheri Crause & Associates Inc. (He quit smoking ten years ago this month.) Cheri Crause is a certified financial planner in Victoria, BC.

www.chericrause.com

rick.hoogendoorn@shaw.ca

Merck Investors Can Sleep Easier (Not Easy) DailyFinance By Brian Orelli, The Motley Fool Posted 3:34PM 02/06/12 Investing Merck (NYS: MRK) said today that its insomnia drug suvorexant had passed two phase 3 trials, putting it on track for an FDA filing this year. But that doesn't mean investors can sleep ... and more »

Delaware Investments Tops "Barron's Fund Families Report" for 2011 MarketWatch (press release) PHILADELPHIA, Feb 06, 2012 (BUSINESS WIRE) -- Delaware Investments, a member of Macquarie Group, is ranked first in the "Barron's Fund Families Report" for 2011, according to the annual Barron's ranking. In the publication's Feb. and more »

Investments for Income Lovers Motley Fool With interest rates at historical lows, folks are having a hard time squeezing any meaningful income out of their investments. While you don't want to go out too far on a limb in search of higher yields, there are some steps you can take to boost your ... and more »

Your Most Important Investing Decision of the Next 10 Years TheStreet.com And these are some of the most boring companies you can think of -- real-state investment trusts (REITs), pipeline operators and cigarette makers. But they all have one thing in common. As the chief investment strategist behind High-Yield Investing, ... and more »

Ask the Experts: What looks attractive for investors? Kansas City Star By CLAUDIA BUCK With the economy starting to perk up, investors are wondering where they should be looking next. Here with some recommendations is Glenn Kenes, managing director of investments with Barber-Kenes Capital Management Group in Auburn, ... and more »

J.D. Power and Associates Recognizes Merrill Edge(R) Call Centers for Customer ... MarketWatch (press release) For customers who prefer to invest on their own, Merrill Edge provides an online self-directed investing platform, with robust tools and resources to help them make informed investment decisions. "This designation acknowledges the strong commitment ... and more »

Investing mistakes even the pros make Sydney Morning Herald The best investors learn from their mistakes over time. And because I've made plenty of mistakes during my career, I'll optimistically say that means I've had lots of room for personal growth. Lucky you, then, for being able to learn from some of the ... and more »

TD Ameritrade Investor Poll: Younger Investors More Likely to Invest "More" in ... MarketWatch (press release) OMAHA, Neb., Feb 06, 2012 (BUSINESS WIRE) -- The European debt crisis, US unemployment, the housing market, and political uncertainty - a laundry list of issues that may be causing investors to think more cautiously about their financial futures. and more »

3 Dow Stocks That Jumped in a Down Market DailyFinance By Dan Caplinger, The Motley Fool Posted 7:06PM 02/06/12 Investing The stock market may have been down today, but things could have been worse. After falling nearly 70 points in early trading, the Dow Jones Industrials (INDEX: ^DJI) recovered to finish ... Investing In The Dogs Of The DowSeeking Alpha all 12 news articles »

Freedom Investing 2012 Forbes I've been discussing foreign freedom investing for a decade now. In the spring of 2010, I used the term “Ring-of-Fire” to describe countries with a high debt and deficit and suggested avoiding them. A year later, I revisited that advice and counseled ... and more »