TODAY

TODAY   |  April 10, 2013

How one man plans to retire early (at age 40)

Most of us hope to save enough money to retire by 65, but one Florida man says he’s figured out a way to retire more than 20 years earlier. NBC’s Tamron Hall reports on his strategy, and personal finance expert Carmen Wong Ulrich explains what we can learn from this unusual case.

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>>> 8:12, most americans hope to save enough money to retire by the time they reach, i don't know, about 65, but what if you could retire much, much earlier? nbc's tamron hall is here with one man's story. good morning to you.

>> good morning, matt. 30-year-old jason feeber has a plan and everything he does is working towards the goal of retiring before he hits age 40.

>> this weekend we're going to do some noodles and spaghetti and meat and you've got a great dinner there, five, six bucks.

>> reporter: 30-year-old jason feeber is all about saving money and writes a blog about his plan to retire by age 40.

>> i live modestly, i try to save 60%, 70% of my net income every month.

>> reporter: his strategy is to streamline. he moved from michigan to florida to save money in state tax taxes. he got rid of his car to save on transportation.

>> is it difficult to wait for a bus with eight inches of snow around you.

>> reporter: he earns $50,000 a year and keeps his monthly expenses low, rent $900, student loans $200, transportation $50 and food between $200 and $250 for a total monthly expense of $1,400.

>> my first year i was lean, spending $120 to $140 a month in food so there was a lot of sandwiches and noodles.

>> reporter: being frugal paid off. feeber saved more than $100,000 in three years on his plan, he says he can save more than $400,000 by the time he's 35, that's plenty for him to retire on, since he only spends about $15,000 a year. investments are also part of his strategy.

>> what i'm doing is not really all about quitting your job tomorrow and playing golf for the rest of your life or something like that. it's not necessarily about retiring in the traditional sense. i'm trying to buy time so i'm saving as much money as i can.

>> his plan may not be for everyone. he does not plan on having kids and as for medical expenses he's optimistic that he will be healthy after he retires. once he retires he plans to spend his time doing charity work so matt, disclaimer, obviously not for everyone but it's working for him.

>> it gets people thinking, tom tamron, thank you.

>> carmen wong ulrich, welcome.

>> thank you for having me here.

>> jason says if he saves more than $400,000 he's set because his expenses are low. lifespan he has to figure he's going to live into his 80s.

>> there nor guarantees in life. he says he feels healthy and wants to remain healthy but things happen. third of us end up on disability. also, how is he investing this money? there's no guarantee of return and if he sits that in a savings account the interest is not enough.

>> if he can get 5% on that $400,000 every year he kicks off $20,000, he says he only spends $15,000 a year, he doesn't want to have kids, if he stays healthy, can he do it?

>> that's the thing but still life happens. what happens if he gets injured on the job?

>> not going to be working he's quitting.

>> and he could cross the road and something could happen. what we could learn from this is that you have control over your expenses and this is a lifestyle choice that you can make at least partially.

>> but you do have to ask the question, do you want to live life to its fullest now. in other words if you're constantly skimping and saving to get to that retirement age early, would it be better for you if you had a little more luxury in your life and allowed yourself some more expenses now, and just pushed retirement off ten years?

>> this is a personal choice . this is a commitment to a lifestyle, basically living like a college student , not for those four years but for 20 years. can you do that? first to do that you have to plan the spending of every single dollar. it's that austere. is everyone around you on the side. he mentions not having kids. what if you have kids, a spouse or partner.

>> i guess could you go back to work.

>> and get a second job. i've seen folks who get a second job and funnel that money into savings and reach six figures much more quickly.

>> help me figure out that number thing. how does the average person figure out their number?

>> there's no magical rule for that because it's complicated but you can get an idea by estimating your expenses in retirement and it is an estimate and how many years you're going to retire. two things are important to consider, one, medical coverage so if you're going to be retiring before the age where you can get government assistance for that you have to pay for health care on your own. that could be a third of your budget and second, taxes. if you're retiring before the age of 59 1/2, 401(k)s and i.r.a. gz are not on your investment plan because you can't have access to those without penalties or taxes so be smart how you invest.

>> i like your takeaway it does tell people that they can have more control over their financial future right now.

>> absolutely, that is the point is that you don't have to be this austere. if you're living paycheck to paycheck this say choice you can make and you can do things to change it and retire early, maybe not at