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Saving for Retirement

An Adventurer's Guide to Extremely Early Retirement

Save smart and limit expenses, and you, too, can retire sooner rather than later.

Editor's note: This article is adapted from Kiplinger's Retirement Planning 2007 guide. Order your copy today.

Eighteen years ago, when Billy and Akaisha Kaderli were in their late thirties, they decided they were working more and enjoying it less. So Billy, a stockbroker, and Akaisha, a restaurant owner-turned-office manager, vowed to save enough money to retire in two years. And they did. "Every time I looked at a latte or a new pair of shoes, I decided I didn't need them," says Akaisha. "I'd say to myself: I could either buy this or be days closer to our goal."

By 1991, Billy and Akaisha had accumulated about $500,000, including a $100,000 profit from the sale of their home. They put their belongings in storage and set out to see the world. After six months on a Caribbean island, they headed for South America. Returning to California a year and a half later, they bought an RV and wandered around the western states for two years. Then it was off to Mexico, where they had planned to visit for a few months and ended up staying four years. The Kaderlis, now both 54, are currently traveling in the South Pacific. They keep a small house in Mesa, Ariz.

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While this might sound like an extravagant lifestyle, Billy and Akaisha limit their expenses to about $24,000 a year. They eat well and enjoy themselves but don't buy a lot of stuff. "We base our lives on gathering experiences rather than collecting things," says Billy. They keep their friends and families -- and about 50,000 visitors a day -- up to date on their adventures through their Web site (www.retireearlylifestyle.com).

The couple invests mainly in low-cost index funds, withdrawing about 3% of the balance each year. "At this point in our lives, we are less worried about running out of money and more concerned about not having enough time to enjoy it," says Billy.