Money

A couple that saved \$1 million to retire at age 43 shares the first steps they took

Mr. and Mrs. 1500
Source: Mr. and Mrs. 1500

In January 2013, "Mr. and Mrs. 1500" — the pseudonym of soon-to-be early retirees Carl and Mindy — decided to get serious about their savings goals.

At the time, they had about \$586,000 in investments and cash. Today, nearly four years later, their net worth is roughly \$1.45 million, thanks to downsizing, cutting expenses, and smart investing strategies.

You can read more about their initial financial standing and current net worth, which they update monthly, on their blog.

In order to reach their goal of retiring at the age of 43, or 1,500 days since they started the blog, the husband-and-wife duo with two kids took one, simple step: They calculated exactly how much money they needed to retire comfortably, which meant first analyzing their spending habits.

"My wife and I wrote all of our expenses in a book," Carl explains on their blog. "Every time we returned from shopping or paid a bill, we logged it."

Mr. and Mrs. 1500
Source: Mr. and Mrs. 1500

Based on their logs, they determined they could live on \$24,000 a year. To be safe, they added a \$6,000 cushion and bumped that estimate up to \$30,000 a year.

Using the "4 percent rule" — the slightly controversial rule of thumb used to help you determine the amount you can withdraw from your retirement savings each year without running out — they came up with their magic number.

"Based on the 4% rule, I need about \$800,000 to retire with no debt," Carl wrote on the blog in 2013. "However, I'd like very much to be able to help my children through college, so I'm going to bump the number up to \$1,000,000."

The couple committed to putting \$2,000 a month toward their investments in order to reach the seven-figure mark, which they did ahead of schedule — in April 2016.

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Establishing a specific monthly savings goal made it easier to cut costs, which they did immediately, as did recording each and every expense to see exactly how much money they were spending and where there was room to save.

"You'll be surprised," they say. "We started doing this and were like, 'Wow, we spent that much on groceries? What were we thinking?' After you do that, evaluate every one of those line items and see how you can cut those down."