Retiring Early - Part 1

So this is a topic my lovely wife and I talk about occasionally. It's something I would absolutely LOVE to do. Imagine not having to work anymore. Well at least not work my arse off anymore.

Work Optional

I fully intend to buy this book and check it out. She says for her and her partner, they retired once they had 36x their annual income saved. They were both on 6 figure salaries and had no kids. Well duh, frankly I think it would be fairly easy to do if that was the case. So in my situation, having 3 kids and with my wife alas not getting paid for the super job she does in looking after all of us and our home, we're going to need a whole lot more. But how much? Well, as Tanja Hester says, you've got to put together a realistic budget of what you'll need going forward and work from there. So here goes.

House - I think we need to spend about 25k on our house to renovate and modernise it. That will need to be done prior to any possible retirement consideration.
Rates - Assuming we maintain 2 houses, we're talking about 5k per year, including rates and some small allowance for increases.
Insurance - House and contents insurance on both places is going to be about 2k per year.
Healthcare - I will NEVER have private health cover again, it's one of the biggest scams in Australian history if you ask me. What a total waste of money for 95% of people, 95% of the time. But, I think it wise to consider that we should have at least 5k put aside for medical costs that may not be covered  by Medicare.
Car - Hmm, not sure about this one. I think it best to pay cash upfront, so let's say 25k.
Utilities - Australian electricity prices. Fark. Let's say we aim for 5k per year.
Maintenance - Hard to estimate and shouldn't be so bad once reno's are done. Still, I think 2k per year is a good amount.
Fuel - A tank per week, so 3k per year.
Groceries - 12k per year.
Booze - Don't judge ok, 5k per year. We like a beer :)
Kids - Wow this one is hard to estimate. It will obviously also change as they get older and eventually head out into the world on their own. I'd say up to age of 10, 1.5k per year each, 11-18, 3k per year each. I'm not sure if that covers it, but hopefully it does.
Holidays - Thumb suck here, but aiming for 10k per year, less frequently and lower standard when with kids, and more frequently and higher standard when without. I think 10k should cover both bases.
Stuff - The wife and I both have our interests. I'd say 5k per year should cover us.
Contingency - I'll put 10% on top of all variable costs.
Debts - If we're talking right now, well mortgage and CC is about 225k all-told. So I'll need to budget paying that off at a reasonable rate, as well as factoring in the retirement side of things. We also need to have a life while all this is happening too, so it might be easier said than done.

Hmm, so we have lump-sum requirements of 55k, plus yearly requirements of 53.5k right now. With contingency we're talking 60k lump and 60k variable to round it out. I've read a similar 60k number before for retirees, so I think that may be reasonable. I need to do some research into Centrelink to find out what our pension is likely to be, plus factor in super returns and hopefully a surplus from the rental property.

First of course, is the need to pay off the mortgage. So we'll do some modelling and get back to you.

Another option for me to think about is that once we have enough of the one-off items ticked off and a reasonable nest-egg behind us, perhaps full retirement is not necessarilly first cab off the rank - I'd be quite happy to do a few shifts at the pub or something like that per week, to earn that way.