Justin McCurry, a father of three based in Raleigh, North Carolina, quit his engineering job in 2013 and retired at age 33. His wife, Kaisorn, joined him in early retirement in 2016 at age 38.
"Neither of us ever reached a six-figure salary, with my salary topping out at $69,000 and [Kaisorn's] at $74,000," Justin writes on his blog, Root of Good, which explains how they built a seven-figure portfolio in 10 years to retire early.
They aim to spend $40,000 a year, or $3,333 per month, but, since their portfolio has gone up quite a bit in the past couple of years, they're going to start "giving ourselves permission to spend $5,000, $10,000 or $20,000 more than that if we find something worthwhile to spend it on," Justin tells CNBC Make It.
The McCurrys have spent $22,335 over the first 10 months of 2018. Their most expensive month has been June, when they spent $3,554, slightly above their target. That month, they prepaid $1,136 on their water and electricity bills and spent $858 on home insurance for the year and car insurance for six months.
Some months, they'll spend significantly less, like September 2018, when they spent just $1,342. Their biggest two categories of spending that month were food — they spent $596 on groceries — and travel, which set them back $494.
Ultimately, flexibility is key in early retirement: "You may have to spend less if the markets go down. Or, you may be able to spend more than what you originally budgeted for," says Justin. "As long as you're OK cutting back on some of the wants if your portfolio goes down, then you can still cover your needs without worrying about depleting your assets prematurely."
They worked strategically for years in order to get to a comfortable financial place. By tracking their expenses and living frugally in Raleigh, "every year we saved more than half of our income," Justin says. At their peak, earnings-wise, they made a combined $138,000 and saved up to 70 percent of it.
They didn't just save, either: They put their money to work. "We consistently pumped our savings into 401(k)'s, IRA's, HSA's, 529's, and regular brokerage accounts," Justin writes. "These investments grew enormously over roughly 10 years and made us financially independent today."
You can see a detailed breakdown of how their money grew from $64,000 in 2004 to $1.3 million in 2014 on their blog.
Once you retire, whether you do it at the average age of 63 or sooner, the key is to make sure your money lasts through your golden years. It's smart to set a retirement budget and stick to it. That number is highly personal and depends on your lifestyle, spending habits and when you decide to settle down. For the McCurrys, it started at $32,000 per year.
To get to that number, they analyzed their spending habits. Between 2004 and 2014, the decade they were focused on saving for the future, the McCurrys spent an average of about $24,000 a year on "core expense," Justin says. He defines those as expenses that will continue into retirement, such as housing, cars, groceries, clothes and entertainment. That number does not include temporary expenses, such as student loans, child care and their mortgage at the time (which they paid off in 2015), since those expenses would be irrelevant in the future.
The McCurrys then projected how their family's expenses would change in retirement and added an extra $8,000 to cover costs like health care and travel, bringing the bottom line retirement budget to $32,000 a year, which they hit in 2014 and went below in 2015.
The budget isn't set in stone. In 2016, for example, the McCurrys revisited their portfolio and realized they could increase their retirement budget to $40,000 a year. That year, they spent $38,991. And they can "always trim back on spending in some areas if our investment portfolio performed really poorly or we had an unexpected expense in one category," Justin says.
Today, their net worth hovers around $2 million, thanks to investment income, plus money they earn from side projects like the blog and early retirement lifestyle consulting gigs.
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