I have been working through the ERE book and have been trying to apply it to my situation. I am close to 50 years of age and have been saving for close to 10 years under an ER plan. I seem to be on track according to the original plan but thanks to the book and this forum, I have realized that I need to cut expenses if I want to accelerate early retirement.
My situation is that I will have a defined benefit pension at age 60. It is not tied to inflation so I need additional cash to cover inflation. At 65, social security kicks in (???). In approximate terms, the defined benefit pension will be about 25k, and social security 10k, if it is still available. My DW also has a retirement benefit, which is in Euros and we don't know exactly how much it will be. It may be substantial or not, depending on how politics affect the pension.
My ER mission is to bridge the time from early retirement to when the defined benefit pension kicks in. I currently have about 145k assets, mostly in a 457 plan, similar to a 401k but which allows early withdrawal.
Current annual expenses are about 50k, annual savings about 15k. Expenses include about 10k in mortgage payments which should be going away in a few years, two car payments totaling about 7.5k annually, and some savings for unexpected major purchases (fridge, washer, etc.) which are actually savings but are counted as expenses.
I know how to reduce my expenses to about 5k per year by selling my home and cars, and moving on to my sailboat. However that is not acceptable to my DW. So my target expense for retirement is about 30k, living in the same house, driving paid for cars, and trying to cut food and entertainment expenses to a more reasonable level. I am reviewing all expenses to find things to cut, but it is somewhat difficult to cut things we are used to.
My current strategy is to continue to work and save for about five years, then retire early, withdrawing 30k per year from the 457 account until the pension kicks in at age 60. Then I would make up the difference between the pension and 30k budgeted expense until social security kicks in at age 65.
So under these conditions, the key is to live with extremely low expenses between the time of early retirement and age 60. The lower annual expenses, the earlier I can retire. Another key is to pay off the mortgage and cars. Once that is done, my early retirement will be very close. When my DW's retirement income is known, we can be a little more sure about when we can quit the current jobs.
I enjoyed reading the ERE book and if I were single, I would sell the house and cars and move on to the boat, socking away the cash. In fact, as a single person, I could retire today with my current assets plus the equity in my home. However it has to be a mutual decision, so I continue to work. After having gone through the spreadsheet exercise, it is a very liberating feeling to know that your net worth is enough to live on (with some lifestyle changes).