When you want to quit, how low will you go?

I’ve decided to work hard toward an early retirement (like, maybe in August 2017) and that will be quite the challenge considering the debt I need to pay off and the money I need to squirrel away.

‘been thinking a lot about how I can accomplish this and this led me to think, how low go I go? How much am I willing to give up in terms of my current lifestyle with this goal of retiring early?

This led me to come up with an amount of money I am willing to live on each year.

Because I hate completing my taxes every year and I hate accountants and lawyers (sorry if you, reader, are either or both of those), I am thinking about earning just enough to not have to file.Or, if I file, just need to file that EZ form.

According to Turbotax,

In 2016 for example, if you are under age 65 and single, you must file a tax return if you earn $10,350 or more, which is the sum of the 2016 standard deduction for a single taxpayer plus one exemption.

I can then add my college kid for another exemption of $4500, which brings my total to $14,850. Once a month, I can hand $375 over to the kid. Good luck living on that, honey.

Keeping the long term in sight,  I am preparing to live on the $10,350, increasing it as allowed by the IRS.

I know there will be some state tax to pay and I am ok with that because the state tax form is pretty easy to gag my way through.

So, here is what I’ve come up with so far: rapidly pay down my debt, rapidly build up my 401K and HSA so I can retire when I turn 60 in August.

I plan to live on $10, 350 each year from my 401K until I draw from Social Security.

Starting today, I am going to practice living on that amount, which comes out to $28 a day.

 

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Author: camcoogan

Cam is a single woman in her late 50's heading into retirement mired in debt. Knowing she isn't alone, Cam Coogan is sharing her questions, successes and failures to give and get help in paying down debt and stoking the retirement coffers to enjoy a care-free retirement. Well, at least Cam can be a great example of what NOT to do.

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